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Glass 

Book .'UbUJ- 



HEARINGS 



THE MATTER OF THE GRANTING OF PERMITS FOR THE 

TRANSMISSION FROM THE DOMINION OF CANADA 

INTO THE UNITED STATES OF POWER 

FROM THE NIAGARA RIVER, 



THE SECRETARY OF WAR, 



WASHINGTON, D. C^ 
NOVEMBER 26 AND 27, 1906. 



WASHINGTON: 

GOVERNMENT PRINTTNG OFFICE. 
1906. 



HEARINGS 



THE MATTER OF THE GRANTING OF PERMITS FOR THE 
TRANSMISSION FROM THE DOMINION OF QNADA 
INTO THE UNITED STATES OF POWER ^-^ ( 
FROM THE NIAGARA RIVER, 77/: 



BEFORE 



U.^. THE SECRETARY OF WAR, 



WASHINGTON, D. C, 
NOVEMBER 26 AND 27, 1906. 



WASHINGTON: 

GOVERNMENT PRINTING OFFICE-. 

1906. 



War Department. 

Document No. 291. 

Office of the Chief of Engineers. 



JAN 9 iy07 
D.ofD. 



o 



CONTENTS. 



statements of — Page. 

J. Horace McFarland 5 

A. K. Potter 24 

F. W. Stevens 28 

F. B. De Berard 35 

Henry E. Gregory 36 

Dr. John M. Clarke 38 

Clinton Rogers Woodruff 44 

J. Horace McFarland 51 

Hon. Charles H. Keep 54 

Francis Lynde Stetson 54 

W. Caryl Ely 55 

Francis Lynde Stetson 63 

Gen. Francis V. Greene 87 

J. Horace McFarland 88 

Morris Cohn, jr 94 

Francis Lynde Stetson 101 

Gen. Francis V. Greene 113 

Paul D. Cravath 123 

John G. Johnson 132 

• Frank A. Dudley 144 

3 



HEARING BEFORE HON. WILLIAM H. TAFT, SECRETARY OP WAR, 
HELD AT WASHINGTON, D. C, NOVEMBER 26 AND 27, 1906, 
IN THE MATTER OF GRANTING PERMITS FOR THE TRANSMIS- 
SION OF NIAGARA POWER FROM THE DOMINION OF CANADA 

into the united states. 

Washington, D. C, 

November 26, 1906 — 10 o'clock a. m. 

Secretary Taft. This morning was set for the hearing of the order 
to be made on the reports with reference to the water-power situation 
at Niagara, on the Canadian side, or rather with reference to the 
importation of horsepower and the division of the amount to be 
allowed between the companies making application for it. I have 
asked the Chief of Engineers to be here and also the members of the 
Niagara Waterways Commission. I think they are all represented. 

The only question to be settled now is that of the order of hearing. 
Is Mr. McFarland present? 

Mr. McFarland. Yes, sir. 

STATEMENT OF J. HORACE m'fARLAND, PRESIDENT OF THE AMERICAN 

CIVIC ASSOCIATION. 

Secretary Taft. Mr. McFarland, your position, as I understand 
you from your letter, is that you oppose the importation of any horse- 
power from Canada? 

Mr. McFarland. AVith certain exceptions, Mr. Secretary. 

Secretary Taft. Then, possibl3^ as you take that position, you had 
better be heard first. 

Mr. McFarland. I would be very glad to be heard first. We have 
here coj^ies of our brief. 

Secretary Taft. I will give you the opening and the close. 

Mr. McFarland. There are also representatives here, Mr. Secre- 
tary, of a number of other organizations, whose names it might be 
well to have at this time. 

Secretary Taft. You represent the civic association, do you ? 

Mr. McFarland. The American Civic Association, Mr. Secretary. 

I maj'^ say also that Judge J. K. Potter is here to speak as one of 
the commissioners of the New York State Reservation at Niagara. 
That is a commission appointed by the State of New York, as you are 
probably aware. 

Mr. F. W. Stevens represents the special Niagara committee of the 
Chamber of Commerce of the State of New York. 

Mr. F. B. De Berard represents the Merchants' Association of the 
city of New York. 

Mr. H. E. Gregory represents the American Scenic and Historic 
Preservation Society. 

5 



b TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Dr. John M. Clarke, the State geologist of New York, is also 
present. 

The American Civic Association is present, Mr. Secretary, in the 
person of its president, who is now addressing you, and of its secre- 
tary, Mr. Clinton Rogers Woodruff, of Philadelphia, and its treas- 
urer, Mr. William B. Howland, of New York. 

Secretary Taft. You may go on now, Mr. McFarland. 

Mr. McFarland. Mr. Secretary, it seems wise for us to outline our 
point of view by urging, first, the reason for the law under which 
you are now acting as a tribunal. 

We believe that the act of June 29, 1906, is primarily an act for 
the preservation of Niagara Falls and not for any other purpose. 
We believe, and we contend, that this act came into existence as a law 
by reason of the insistence of the great body of the American people, 
manifested by petition, by resolution, by letters addressed to the 
President, to Members and committees of Congress, and recently, I 
fancy, to yourself, and by the presence and argument at hearings held 
by the Rivers and Harbors Committee of the House of Representa- 
tives of those acting for important national organizations of a phil- 
anthropic and general character. 

Secretary Taft. You would not claim that what has happened 
since ought to affect the construction of the act of Congress, would 
you? 

Mr. McFarland. Only as it bears on the fact that the people are 
again reiterating their demand, the people not taking into account 
details as much as intent, Mr. Secretary. 

Secretary Taft. I do not see what popular expression has to do 
with the construction of a statute after the statute has been passed, I 
confess. 

Mr. McFarland. I am not a lawj^er, Mr. Secretary. I am told 
that there are rules which make it proper to show the condition of 
public sentiment as bearing upon the mischief which an act is ex- 
pected to remedy. 

Secretary Taft. After the act is passed ? 

Mr. McFarland. It is a continuation of the same sentiment and 
practically a duplication. 

However, abandoning that, Mr. Secretary, we think that we could 
rest on that manifestation of public sentiment which brought the 
act into existence. In compliance with that will of the people this 
act certainly recites definitely the thought of preservation of Niagara 
Falls, for the language refers to possible diversions which, " in con- 
nection with the amount diverted on the Canadian side, shall not 
injure or interfere with * * * tlie scenic grandeur of Niagara 
Falls." 

In the act there is another provision which seems to indicate a 
desire, primarily, to preserve Niagara Falls — that one referring to 
the removal of structures which may be placed in violation of the act. 

There is also a most urgent insistency in this act for the negotiation 
of a treaty, and that insistence is not for the conservation of any com- 
mercial interests, Mr. Secretary, but primarily, as the act recites, " for 
the purpose of effectually providing by suitable treaty with said 
Government (the Government of Great Britain) for such regulation 
and control of the waters of Niagara River and its tributaries as will 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. < 

preserve the scenic grandeur of Niagara Falls and of the rapids in 
said river." 

As showing something of the feeling of the people as it existed at 
the time this act Avas imder consideration I read you a sentence from 
the report of the Rivers and Harbors Committee, which accompanied 
House joint resolution 83, as follows: 

Numerous petitions liave been referred to this committee protesting against 
the use of the waters of Niagara River for power purposes. The opposition 
manifested to the promotion of material interests at the cost of the scenic 
grandeur of Niagara Falls has been so vigorous and so general as to cause the 
President to direct attention to the subject in his message and also to justify 
action by Congress. 

It may be noted, as you are well aware, Mr. Secretary, that up to 
the time the present agitation was inaugurated, a little more than a 
year ago, b}^ the association with which I am connected, this matter 
was considered purely as a prerogative of the State of New York. 
The Federal authority had not been exerted. ' Congressman Burton, 
who is the author of this bill, expressed some surprise that " the com- 
panies which have proceeded to divert the waters of the river under 
authority of the State of New York should never have appealed to 
Congress or to the Federal Government to confirm the authority 
granted by the State," and he says " the Federal authority should 
now be exerted" — for. what purpose? Unquestionably, as he says, 
" for the preservation of the scenic grandeur of Niagara Falls." 

He discusses, as you have doubtless before informed yourself, the 
" very large responsibility " which is imposed upon you, for he 
wishes to have considered the question of impairment of the scenic 
beauty of the cataract, which is the cause for the imposition of this 
responsibility. 

We insist, Mr. Secretary, that in the mind of the framer of this 
bill and of the people who caused its enactment, there Avas no other 
thought than that of the preservation of Niagara Falls as a great 
scenic feature. This legislation was not demanded by any of the 
gentlemen representing private interests whom I see present this 
morning. It was demanded by the people. Not a single one of 
the priA^ate interests appeared in its faA^or. They all appeared 
against it. 

We submit, therefore, that Ave are setting forth to 3'ou, substan- 
tially and conclusively, the dictum that this act is for the preserva- 
tion of Niagara Falls; that it Avas the result of a great public up- 
rising; that it Avas not asked or desired by any of the private interests 
which noAv desire advantage under it. 

In vieAv of these facts and of the well knoAvn and continually mani- 
fested public interest in the complete (and not the partial) preserva- 
tion of Niagara Falls, Ave urge that Ave haA^e established the original 
intent, spirit, and inspiration of the act of June 30, 1006. 

This act, hoAvcA^er, includes certain limitations, but those limita- 
tions bear only on the purpose of the act for the preservation of 
Niagara Falls. It is specifically provided that there are limitations 
on your authority, but those limitations and quantities, as you are 
Avell aAvare, are mentioned specifically as in nowise to be construed as 
directions to you to issue permits for the diversion of water or the 
admission of poAver from Canada. 



8 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

It plainly appears that if you shall find or deem the use of the 
water of the Niagara River for power production to interfere with 
" the scenic grandeur of Niagara Falls," the main purpose of the law, 
you are empowered, under the law, to refuse to grant any permits for 
the diversion of water, or the transmission of power from the Do- 
minion of Canada, and even to revoke any that may have been 
granted. 

There are certain classes of permits, as you know, mentioned in this 
law, but there is no classification which makes those permits in any 
sense permanent. The authority is certainly specifically given to you 
to revoke any or all permits granted by you under authority of this 
act. 

There is in this act, Mr. Secretary, an implied (and only an im- 
plied) recognition of commercial interests. The main purpose of the 
act is clearly set forth as that of preserving the scenic grandeur of 
Niagara Falls, and the implied recognition of commercial interests is 
subservient to this. 

We respectfully urge that your first and paramount duty under this 
act is to see that nothing shall " injure or interfere with * * * 
the scenic grandeur of Niagara Falls," and that its plainly expressed 
purpose is of far more binding force upon you than a remote implica- 
tion of commercial interests. 

With respect to the admission of power from the Dominion of Can- 
ada, we insist that any such power admitted has an effect upon the 
scenic grandeur of Niagara Falls equivalent to diversion on the Amer- 
ican side. All these gentlemen know, and you yourself are undoubt- 
edly aware of the fact, that the international boundary is considerably 
west of Goat Island, and that the Horseshoe Fall is not, as is some- 
times said, the Canadian Fall, but fully two-fifths, I think, an Amer- 
ican Fall, in the sense of possession. Anything wdiich impairs the 
grandeur of the Horseshoe Fall infringes the rights in Niagara of the 
United States of America, and certainly traverses two of the express 
purposes of this act — the protection of the international boundary 
line and the preservation of Niagara Falls as a scenic feature. 

It is well known, for Captain Kutz has very fully expressed it in 
his report, that Canada can use a very limited amount of the power 
which it is proposed to generate on that side. Captain Kutz puts it 
at about 40,000 horsepower. The Hydro-Electric Power Company, 
of the Province of Ontario, a commission erected by the Province of 
Ontario for the purpose of protecting its citizens against a monopoly 
of electric power, on page 7 of its report, mentions the amount that 
can be reasonably used within a reasonable time as " at least 50,000 
horsepow^er," and it is admitted that is the limit of what Canada can 
now use of this vast amount of power. 

The combined capacity of the three great Canadian power plants 
that are here asking for your goodness to them, is 415,000 horsepower. 
It is freely admitted it is expected to market most of this in the 
United States. Indeed, in one of the briefs submitted to-day by one 
of these power companies in confirmation of its demand for more 
power than has been assigned to it by the members of the International 
Waterways Commission and by Captain Kutz, there is the distinct 
admission that they would prefer to abandon the Canadian market 
for entrance into " the richer markets of the United States," as they 
express it. 



TKANSMISSION OF POWER FEOM THE NIAGARA RIVER. 9 

Well may they say so, when they are under the fear of govern- 
mental regulation in the Dominion of Canada, and there is no regula- 
tion whatever on this side. 

These facts Avere very well known to the framer of this act which 
we are now discussing, and therefore a clear limitation was placed upon 
the total amount of power that might be produced in Canada, by 
reason of his knowledge that there could not be very much of it used 
there. He has covered into the statute, as you know, a total limita- 
tion of 350,000 horsepower, including the amount generated and 
used in Canada. 

That gives this law and yourself practically a complete control of 
the Canadian situation at this time. If you were to shut out every 
single watt of electric energy at noon to-day from crossing the 
Niagara River, it would simply not be produced. Canada can not 
use it and has no expectation of using it for many years. 

For confirmation of that, Mr. Secretary, I should be pleased to 
refer you to this report of the Hydro-Electric Power Commission of 
the Province of Ontario, an official document. 

We insist that between the legal limitation of a total of 350,000 
horsepower and the amount Avhich can really be utilized in Canada 
within the life of this act (which is but three years) 300,000 horse- 
power net is too much to be taken out from the Niagara River with- 
out interfering with the primary purpose of this act — that of pre- 
serving the scenic grandeur of Niagara Falls. 

Of course, these gentlemen have the contrary view. It is not 
unfair, however, to go into some little comparisons as to just what 
water Avill be abstracted if this contention shall be granted and this 
power admitted. 

The intake of the Ontario Power Company is above the first cas- 
cade, and I think draws from the full volume of the Niagara River 
above the " parting of the waters " at the head of Goat Island. It is 
probable this has a bearing on the American Fall as well as on the 
Horseshoe Fall. This intake is (518 feet wide and 13 feet deep — a 
river in itself. What it amounts to is considerably more than the 
volume of the Delaware River where Washington took his troops 
across it — indeed, at its mouth — in actual use of water. 

The great gathering dam of the Electrical Develoi)ment Com- 
pany juts out 785 feet into the Niagara River and is planned to feed 
a channel 27 feet deep — another and larger river extracted from 
Niagara. It takes about 10 per cent more than now flows out of the 
mouth of the Potomac River. 

The Canadian Niagara Power Company takes water at the turbu- 
lent slope just above the Horseshoe Fall, in a canal 282 feet wide and 
15 feet deep — a third river. That takes ten per cent more than the 
Susquehanna River, the greatest of all the rivers I have mentioned, 
at its outfall. 

Secretary Taft. What do you mean by its outfall? 

Mr. McFarland. I mean the average low-water flow, the summer 
flow. I might explain here that in some literature of which I have 
been guilty I have made a mistake wdth respect to the comparisons 
with certain gi^eat rivers of the country. I was unfortunate enough 
to take the average flow, which the eminent hydraulic engineer who 
supplied me the data says is all wrong. The average flow includes 
consideration of the floods, which, in case of the river with which I 



10 TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 

am most familiar, the Susquehanna, sometimes rise to more than 
100,000 cubic feet per second. 

He insists, and he is in no wise interested in this subject or in any 
commercial development — he is a cold-blooded consulting engineer — 
that the only way to consider any river is its average low-water flow, 
its flow during the summer months, at the time the agriculture of the 
country is in its full progress, and these rivers represent what is 
left. 

All combined, Mr. Secretary, the recommendation is to give them, 
for merely the 1G0,000 horsepower, which is called the first limitation 
of this bill, the combined summer drainage of the State of New York, 
with the State of New Jersey thrown in ; and that, it is insisted, will 
make no difl^erence upon the falls ! 

I can confirm these figures for you, and I should be very glad to do 
so. I have not cited a figure which is not either in the report of the 
International Waterways Commission, or in the rej^ort of Capt. 
Charles W. Kutz, or given to me by a capable hydraulic engineer, 
Avhose name I shall be glad to submit to you. 

Now, Mr. Secretary, is it reasonable to suppose that so vast a volume 
of water as this can be abstracted from Niagara River without inter- 
fering with the scenic grandeur, the preservation of which is the 
main purpose of this act? The Waterways Commission has well 
represented this matter in its first report, on March 24, 1906, where it 
is averred that " the glory of Niagara Falls lies in the volume of its 
water rather than in its height or in the surrounding scenery." The 
Avhole Commission, when they reported a little later, very well voiced 
the sentiment of the world, as well as that of the United States of 
America and of the Dominion of Canada, by saying that " in the 
opinion of the Connnission it would be a sacrilege to destroy the 
scenic effect of Niagara Falls." 

Again, this matter has been commented upon by the Waterways 
Commission in another way. Colonel P^rnst was before the Com- 
mittee on Rivers and Harbors and, in his testimony there, speaking 
of his own recommendations in the report of his commission, he said : 
" To divert the quantity of water which we propose there, we think, 
undoubtedly, is going to have an injurious effect. * * * ^Ye can 
not tell ; it is a dangerous experiment." 

You may read volumes and volumes of the testimony of engineers, 
Mr. Secretary, as to the relations of these matters, and you will never 
get any further than you are at this moment, because they differ 
radically. You will find estimates as to the amount of water passmg 
over the brink at Niagara to vary by as much as 80 per cent. You 
will find testimony as to the amount of water passing over the Ameri- 
can fall to vary as much as 50 per cent ; and in the committee room 
of the Committee on Rivers and Harbors, last April, it was shown by 
the testimony of the chairman of the New York State reservation at 
Niagara that the day before, at an average stage of the river, there 
had been less than half the volume passing over the brink of the 
American fall that had been reported by three or four engineers 
within that room within a week. It is just as Colonel Ernst has well 
said : '' No one can tell ; it is a dangerous experiment." 

We respectfully urge to you, Mr. Secretary, that it is not necessary 
to make this experiment. Under the clear intent of the act, you are 
charged with the preservation of Niagara Falls, and you may decline 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 11 

to issue permits for the admission of this power if you believe that 
that admission will infringe upon that which is the main purpose of 
the act. 

It will be urged that these diversions that are now asked are but a 
little. They are not the whole thing. They can not take the whole 
415,000 horsepower. They only want 160,000 noAv, if they can get it, 
but the}' jDut in applications for a vast excess l3eyond that. The 
difference, Mr. Secretary, is but one of degree. It is a question of 
arithmetic more than it is of any other representation. You can 
not have before you a glass of Avater and pour out a fifth of it 
without noticing that there is less water there. You can not remove 
from this room one-fifth of its members without noticing some vacant 
seats. AVlien you are charged with the duty of maintaining the 
integrity of Niagara Falls we fail to see how that integrity can be 
maintained if there is also a purpose, not expressed in the act, of 
seeing how close you can come to interfering with it. 

Captain Kutz, in his report on page 14, states clearly that the 
granting of permits for the admission of a total of 157,500 horsepower 
from Canada would encourage and justify the installation of addi- 
tional machinery for the production of power from Niagara water 
in each of the three large Canadian plants. Therefore, such permits 
as 3^ou are now asked to grant would effectually operate in direct con- 
travention of the paramount purpose of the law, which is unquestion- 
ably for the preservation of Niagara Falls. 

Secretary Taft. I do not quite follow the quotation, or your argu- 
ment from it. Do you mean that if I were to grant permits for 
157.000 horsepower that would necessarily encourage them to think 
I am going to grant more ? 

Mr. ]\IcFarland. Captain Kutz snjs they would be encouraged to 
install additional units and to prepare to generate more power if they 
could have this much encouragement at the start. 

Secretary Taft. Wliy ? 

Mr. McFarland. I will have to refer you to the Captain for that. 

Secretary Taft. But you use that as an argument. What is your 
course of reasoning with respect to it? 

Mr. McFarland. My course of reasoning is that if 157,500 horse 
power is now abstracted the companies will install other machinery 
and that they will then come here again for permission to transmit 
more power. They will say that they have invested money, that they 
have vested rights, and that they must be permitted to go further in 
the experiment of seeing how much can be taken from the Falls with- 
out ruining them. 

Secretary Taft. How can they use such an argument? On what 
'theory can they base a claim that they are going to get more because 
they get a certain amount? 

Mr. McFarland. I hardly think I could suggest how they would 
do it; only they do it. 

Secretary Taft. But we are discussing the question of principle. 
Their position, as I understand it — or whether it be their position or 
not it is one that would naturally suggest itself — is that before Con- 
gress took any action at all leading them to think there was to be any 
limitation, they had invested a certain amount of money in plants. 

Mr. McFarland. Yes, sir. 



12 TRANSMTSSTON OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft. That argument has a certain weight, that because 
they are granted enough to enable them to make a reasonable profit 
out of what they invested before they knew there was to be any limi- 
tation; but it would certainly be a very different argument that 
because we allowed them to have enough to satisfy the investment 
they made before they anticipated this legislation, therefore because 
we granted them that, they liave a right to think we would grant 
them more. I confess I do not follow the reasoning, whether it be 
Captain Kutz's or yours. 

Colonel Ernst. It is not Captain Kutz's. 

Mr. McFarland. I will find the place. I read from paragraph 32, 
page 14, of his report : " If permits are granted for these amounts " — 
that refers to the net amount of 157,500 — " the Ontario Power Com- 
pany would be justified in installing a sev^enth unit as a spare, the 
Canadian Niagara Power Company would be justified in installing 
two more units, one as a spare, making the nominal capacity of its 
plant 6C,000 horsepower. The Electrical Development Company 
would be justified in installing three more units, one of them a spare, 
making the nominal capacity of its plant 75,000 horsepower, half of 
which, the proportion aslvcd for, it would be permitted to transport 
to the United States." 

I am very glad to have you make these statements, becaUvSe it is 
excellent notice to these gentlemen that you do not wish to encourage 
them. 

Secretary Taft. But to get back to the use you made of that state- 
ment. If I followed what you have read, what he means in his ex- 
planation is this, that the distribution of what he recommends of the 
157,000 is really all that they are entitled to, because that which he 
recommends should be distributed of the 157,000, would justify them, 
for purposes of income, in completing that which they had already 
begun. That is what he means, I suppose. 

General Mackenzie. That is the meaning of the words. 

Secretary Taft. Not that he intended to say they would be justified 
in counting on an additional allowance. 

Mr. McFarland. Personally, as an American citizen, I feel a 
little nervous that the engineer officer charged with getting at the 
facts for your consideration should find it necessary to go so deeply 
into the economics from the standpoint of profit production of these 
companies. 

Secretary Taft. Mr. McFarland, we may as well understand each 
other on that subject. I received a protest from you as to what Cap- 
tain Kutz did, on the ground that he went and consulted the cor- 
porations 

Mr. McFarland. I beg your pardon there, Mr. Secretary. My 
protest was that an article, printed in a prominent paper, the Phila- 
delphia Press, stated what he was going to do. I had nothing in 
the world to say about what the captain did, but I passed on to you 
the common fact that was given out to the public as to the sympa- 
thetic interest 

Secretary Taft. Because a plant is owned by a corporation is no 
reason why there should be a feeling that an American citizen is not 
interested in having justice done, is it? 

Mr. McFarland. Precisely. 

Secretary Taft. Secondly, there is no reason why an American 



TEANSMISSION OP POWER FROM THE NIAGARA RIVER. 13 

citizen should not be interested in having an officer discharge faith- 
fully the orders that are given him. 

Mr. McFarland. No, sir. 

Secretary Taft. In the preliminary hearing, what I wanted to 
say — jDossibly I did not say it as clearly as I should have done — was" 
that what I desired to know was what in good faith had been in- 
vested by these corporations on the assumption that there would 
be no limitation imposed on the amount of water they would use ; and 
that was Avhat Captain Kutz was directed to investigate. What 
else could he investigate but the investment of the corporations and 
what their situation was with reference to investments. 

Mr. McFarland. Nothing else, that I can see, Mr. Secretary. 

Secretary Taft. Has he done anything else than that? 

Mr. McFarland. He seems to have done nothing else. 

Secretary Taft. Then why criticise him ? 

Mr. McFarland. I am not criticising him. 

Secretary Taft. I thought you said that as an American citizen 
you did not like his report with reference to that particular subject. 

Mr. McFarland. I said the construction which was placed on my 
letter to you, which came from the way in which a supposedly able 
correspondent 

Secretary Taft. I do not know anything about correspondents or 
newspapers. 

Mr. McFarland. I promptly retracted my statement and showed 
my gratification at Avhat you had said. 

Secretary Taft. What I am anxious to do is to have an atmosphere 
of justice here. Not an atmosphere of hysteria, not an atmosphere of 
corporate greed, but an atmosphere of justice, and that I am going to 
insist on. 

Mr. McFarland. I think you will find that I am 

Secretary Taft. I confess I rather question the propriety of your 
criticising an Army engineer for doing just exactly what he was 
directed to do, and doing it, as I am informed,well ; for Captain Kutz's 
reputation is that of one of the ablest members of the Army Engineer 
Corps, and it is a corps that stands so high that, being the head of 
the War Department, it does make me a little bit impatient to have 
criticisms that I do not think are just directed against them. 

Mr. McFarland. Mr. Secretarj^, in the statement that I have 
quoted here do you think I am criticising Captain Kutz ? 

Secretary Taft. No; but I understood you to do so just now. 

Mr. McFarland. When you teased it out of me. 

Secretary Taft. I did not tease it out of you. 

Mr. McFarland. I was quick to answer. 

Secretary Taft. If it is only the result of teasing, we will pass it 
over. 

Mr. McFarland. That is all. I have no desire to criticise Captain 
Kutz, and I have tried to avoid a word of it. 

I have made my point, Mr. Secretary, that the transmission would 
directly contravene the purpose of the law, in our view. Whether or 
not it is w^ell made is for you to decide. 

As to the reason for Canadian production, why is this power 
sought to be brought into the United States? Why was it not pro- 
duced in the United States of America? The Niagara Eiver is a 
boundary stream between the two countries. Simply because the 



14 TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 

State of New York has resisted the establishment of any more power 
plants, and the New York State Reservation at Niagara has stead- 
fastly refused, under tremendous assaults, of which I have no doubt 
Judge Potter will tell you, to permit any interference at all on that 
side. That is to say, these companies were not able to produce it in 
the United States. . Therefore they went to Canada. 

As to the comparative effect of the diversion of water at Niagara 
Falls, there is very great diiRculty in deciding it, for the reason that 
the abstraction for power production is gradual. It does not happen 
over night. It is impossible to get a market for such vast quantities 
of power at once. One industry is established here, another one is 
established there. Two extra street cars are put on the line here and 
half a dozen at another place. A little more water is abstracted, a 
little more power is j^roduced. You can say you are a day older than 
you were yesterday, but your mirror will not confirm it for you abso- 
lutely. The depletion of Niagara Falls is bound to be so gradual, if 
this powex is admitted, that it will not be noticed except by compari- 
son between two great periods, when its majesty will be found to have 
been seriously affected. 

I urge upon you that it is a very invidious attack made upon the 
great Fall. The depletion is gradual. Doubtless the oldest inhabi- 
tant of Niagara Falls will be here to say he has seen the falls 
every day and he has not seen any difference in them. I should be 
glad, also, to read a letter from a reliable resident of Niagara Falls, 
who will tell you the depletion is distinctly noticeable. 

We urge, however, that the American people, to whose insistence 
the act is due, are not anxious to see how close to the line of disaster 
you can come. All the insistence of the people, all the letters, all the 
urgency, have been for the preservation of Niagara Falls, and for the 
preservation of the whole of it. The President himself seeks and 
hopes, in both his messages, to preserve Niagara Falls in all its glory ; 
not in 80 jier cent or 70 per cent of its glory, or in any portion of its 
glory, but in all its glory, and that is the feeling of the people of the 
United States to-day. 

That the diversions do count is well shown again by the admirable 
report of the International Waterways Commission last April. The 
report was made in these words : " The amount thus far actually 
diverted is but 17,800 cubic feet per second, and has had an appre- 
ciable effect upon the Falls." 

If you should inci'ease that by the full amount which is claimed 
on the American side, and which is not under discussion to-day, 
and by this Canadian diversion which is under discussion to-day, 
if I am right the total would reach something like 44,700 cubic feet 
per second, which is more than twice that which was previously 
reported as showing an appreciable effect upon the Falls, and fully 
20 per cent of the average flow. 

That calculation does not take into account any of the existing or 
proposed diversions incident to the necessary sanitary and naviga- 
tion canals which must inevitably affect the Falls. 

In the various reports of the American members of the Interna- 
tional Waterways Commission, in Colonel Ernst's testimony before 
the Committe on Rivers and Harbors, and in Captain Kutz's excel- 
lent report, stress is laid on the vast amount of capital invested by 
the companies developing and transmitting power at Niagara Falls. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 15 

We agree with jniii that it was wise and necessary that you should 
have all the information that could lead you to jiroperly judge this 
matter; but we do protest against the spirit of expediency which 
has been shown in the recommendations in those reports. As to the 
findings of these engineers, there can be no question whatever. The 
country has al)solute confidence in them; and where the}' differ, as 
they frequently do differ, from the findings of the engineers who 
are interested for the power companies, no one hesitates a fraction 
of a second as to which to believe. We do object to the tone of 
exjDediency in the recommendations of these advisers of the 
Government. 

These recommendations of expediency were disregarded by Con- 
gress in the enactment of this law. It is well known and provable in 
an instant that the recommendation of the International Waterways 
Commission was for the permissible diversion of a very much larger 
amount of water than is possible under the present act. Congress 
disregarded these expedient recommendations. Why? Because of 
the pressure of the people to save Niagara Falls. 

Again I refer to this excellent report of the International Water- 
ways Commission for confirmation as to how such things should be 
regarded. In paragraph 29 of the report of April 26, this occurs : 

The United States Government has reserved lands of striking pieturesque- 
ness. grandeur, and interest, regardless of their value. These illustrations 
would seem to prove conclusively [they had previously injected an illustration 
of the value to the city of New York of its .$225,000,000 park] that the people 
are not inclined to offset mere commercial values against the intangihle. none 
the less great, advantages found in the preservation of the great works of 
nature. 

We could not ask a more admirable presentation of the case than 
that. 

We ask in this presentation, and we urge to you, that in support of 
the preservation of no great work of nature have the people spoken 
so generally and so distinctly as in regard to Niagara Falls. From 
the President to the humblest citizen the contention has been that 
Niagara Falls should be preserved in all their grandeur, not in 80 per 
cent of their grandeur. 

Is it possible that a nation that can afford to build the Panama 
Canal, at a cost of whatever millions will be required, that can afford 
to own and enjoy the Yellowstone National Park, is not both able 
and willing to own, undamaged, and to enjoy in its full majesty, not 
in 80 per cent of its majesty, the chief scenic glory of the western 
world, Niagara Falls? 

Secretary Taft. Mr. McFarland, what you are saying now is quite 
important in the construction of that statute. Is it your idea that 
the statute intended to preserve the scenic beauty of Niagara to the 
point that nothing was to be diverted from it ? 

Mr. McFarland. The statute is silent as to that. 

Secretary TxVft. I understood you to say that it did not want 80 
per cent ; it wanted 100 per cent of the Falls. 

Mr. McFarland. You must understand me to say that the people 
underlying the statute insist that all the Falls be preserved. 

Secretary Taft. I am trying to construe the statute. 

Mr. McFarland, Do not set me to do that. 



16 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft. That is what binds me. I am trying to get your 
idea of its construction. You say 15,600 cubic feet necessarily dimin- 
ishes the vohnne of the water. 

Mr. McFarland. Yes, sir. 

Secretary Taft. But that Congress intended to preserve the full 
scenic beautv. Is it your idea that it is my duty to shut that off 
also? 

Mr. McFarland. I believe it is your duty, Mr. Secretary. 

Secretary Taft. To shut it all off? 

Mr. McFarland. I do not urge you to do it. 

Secretary Taft. But you think it is my duty, under the statute, to 
go that far? 

Mr. McP'arland. I am sorry to be pressed into saying it. I have 
not stated publicly ; but I do believe the time will come, and is 
now 

Secretary Taft. But the time is here now. 

Mr. McFarland. That if you construe this act as I have argued, 
and as I believe it is the intent of the act, it is your duty to shut it 
all off. 

Secretary Taft. I believe that is the necessary result of your argu- 
ment. If that be true, then I will ask you why Congress put in any 
of these limitations at all? 

Mr. McFarland. Mr. Secretary, is it competent for me to show 
what occurred at the time the act was being put through Congress? 

Secretary Taft. I am not going to lay down as strict rules as the 
United States Supreme Court does ordinarily. They are not usually 
patient of hearing arguments that were made in the House or the 
Senate upon the construction of a statute, but I think sometimes 
those arguments are illuminating. 

Mr. McFarland. A very different bill was drafted, and it was 
urged Avith all the fervor that we could bring to bear. It was 
changed by the insistence of these gentlemen who are here, by the 
intrusion of material interests— indeed, by a clean, straightforward 
hold up in the Senate; and the provisions which give you trouble 
were inserted at the last moment in conference committee. The bill 
does not represent the sentiment which brought it into existence. 

Secretary Taft. Ah, but I can not follow the sentiment that 
brought it into existence. I must follow the sentiment that passed it, 
and that is the action of the House and Senate of the United States. 
Do you not admit that, Mr. McFarland ? 

Mr. McFarland. Yes, sir. 

Secretary Taft. Am I not bound by the statute ? 

Mr. McFarland. I think you are bound, absolutely, by the statute, 

Secretary Taft. Is not your statement, therefore, an admission 
that the construction which I asked you whether you did put on the 
statute is a construction that really can not be sustained, in view of 
the language of the statute ? 

Mr. McFarland. I would rather refer that to General Griggs, who 
is prepared at a future time to argue that point. 

Secretary Taft. I would be very glad to hear from anybody repre- 
senting your contention. "What I am trying to do is to get help with 
reference to my duty, not with reference to the sentiment of the coun- 
try now or the sentiment of the country before. The thing that 
governs here is that which takes definite form in the shape of a 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 17 

statute. That is what I am trying to find out. That limits my duty. 
Do 3^ou not admit it? 

Mr. McFarland. Yes, sir; absokitely. 

Secretary Taft. So the question is what the statute was as it 
passed both Houses, not what it was wlien you introduced it. 

Mr. McFarland. Congress unloaded on you its own hard job. 
Everybody knows that. I admit the difficulty of the job, and we all 
have absolute confidence in your handling of it. 

Secretary Taft. I am very much obliged to you if you have, but I 
have to follow a particular course, and that is to take the statute, 
examine it by the four corners, take any relevant circumstance that 
may aid me in reaching what Congress meant, and then follow out. 
Avhat Congress meant. Noav, do you not think the motive of those 
who introduced the bill, or procured its introduction, is not control- 
ling, when 3"ou say yourself it met an obstruction in the Senate, and 
it was a compromise, and that these pro\dsions Avere put in because it 
could not have passed the House and Senate without them? 

Mr. McFarland. Mr. Secretary, it does seem to me when you read 
the bill — and I may just interject here this statement, in order to get 
rid of this feeling of enthusiasm or hysteria which you have alluded 
to 

Secretary Taft. When I say hysteria, I regard anything as hys- 
teria that is not founded on fact. 

Mr. McFarland. Precisely. 

Secretary Taft. And a mere sentiment can not govern me in the 
construction of a statute and the following out of a sworn duty. Do 
you not agree to that ? 

Mr. McFarland. I do; and in order to get rid of the feeling that I 
was not a fair advocate, I submitted the law to one of the ablest law- 
yers in the State of Pennsylvania, a deputy attorney -general, the 
present counsel of the Pennsylvania Railroad, a man who is well 
known and respected, Hon. Lyman D. Gilbert. I asked him to read 
it clear through and to tell me Avhat it was. He said, " It is a statute 
for the preservation of Niagara Falls." " Under it, Mr. Gilbert, 
what may the Secretary do ? " " He ma}^ refuse admission to all 
power from Canada and all diversion of the water on the American 
side." I then asked him wliether there was in that bill any specific 
recognition of equal binding force with the main purpose of the bill, 
of the corporate interests involved. He said, " There is a minor rec- 
ommendation, but it is specifically made subordinate, in the provision 
of penalties, in the character of the limitation upon the authority of 
the Secretary, to the main purpose of the bill. The bill is to preserve 
Niagara Falls, and the Secretary is authorized to preserve Niagara 
Fall 1 under it, by whatever means he finds wise." That is much bet- 
ter than my own opinion, because I admit I am an enthusiast, and 
perhaps hysterical. 

We believe, Mr. Secretary — I say that with the utmost frankness — 
that it would be wrong and vicious to take advantage of these gentle- 
men who have invested their money before this idea came into the 
country, and to dispossess them without compensation. No honest 
American citizen would ever suggest that an honest dollar invested in 
Niagara power production prior to the beginning of this agitation 
should be lost to the man who invested it. We think the j^eople of the 

18447—06 2 



18 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

United States are big enough and rich enough to own those P'alls and 
pay for them, if they must. 

Secretary Taft. But the act makes no provision for the payment, 
does it ? 

Mr. McFAKI.A^D. The act makes no provision whatever for the 
payment. It is not for me to suggest to you, of course, Mr. Secretary, 
but I feel sure you would have no difficulty in referring any difficul- 
ties you found under it to the source of appropriations — the House of. 
Representatives. If you find that you can not preserve the scenic 
glory of Niagara Falls without causing injustice, there is a course 
o]3en to you, I fancy. It is not for me to suggest it. Have I made 
myself clear upon that? 

Secretar}^ Taft. You think Congress intended, then, that if I found 
the Falls would be injured by a continuance of this taking of 15,600 
cubic feet on this side, what I ought to do is to withhold the permit 
and then refer to Congress the question whether they will approjoriate 
money to paj the value of what I deprive these companies of? 

Mr. McFarland. I may say, sir, that in the discussions preceding 
the passage of this act that matter came up repeatedly with Con- 
gressman Burton. No man had any other idea than that it would 
cost something to preserve Niagara Falls; and if I remember cor- 
rectly, Mr. Burton said he thought there would be no difficulty about 
the obtaining of an appropriation for that under the proper con- 
ditions. 

I think it would be an outrage to cut off this vast work up there 
and simply say, because we have paramount power. " We ask you 
to forfeit all your investments," These gentlemen have been honest 
in their production of tliis power. Their intent is all right. I have 
no quarrel with it. There are a thousand equivalent cases that may 
occur where relief is furnished. 

Secretary Taft. Is it not usual in preparing to condemn property 
CO provide for payment for its value in the same act by which the 
property is taken? 

Mr. McFakland. I am not a lawyer, Mr. Secretary, and I can not 
iinswer that. 

I am afraid I have not established my point. 

Secretary Taft. I have your idea. 

Mr. McFarland. I would like to raise another point at this time. 
The United States is vigorously engaged in the restriction of certain 
aggregations of capital, which have come to be known as monopolies, 
through its judicial department. It seems to me that where there is 
the least possible opportunity presented for the Executive Department 
to prevent the formation or the fostering of the growth of another 
monopoh it should be used. This is a very poor time, Mr. Secretary, 
to create a new monopoly. That that fear is not unfounded is dis- 
tinctly shown by the attitude of the government of the province of 
Ontario at this time. There has been formed there the Hydro- 
Electric Power Commission, charged with the duty of finding what 
it really costs to develop power from the Niagara River, and of tak- 
ing such action as shall eventually furnish that power at the mini- 
mum cost to the people within reasonable radius of Niagara Falls. 
That contention is well shown in one of the briefs which is here 
to-day, a brief, I think, of the Electrical Development Company, of 
Ontario. They present many extracts to show the present tendency 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 19 

with relations to one or the other of the contending organizations 
here. 

We feel that it is a dangerous thing to foster the unprotected 
growth of a vast electrical monopoly in and about the Niagara fron- 
tier of the United States at this time if, by any legal means, it may 
be restrained. The admision of 350,000 horsepower, or of net 300,000 
horsepower, or of half that amount, from Canada, tends very 
strongly to the growth of just such a monopoly. So far as the power 
production has proceeded, it has resulted in practically no benefits to 
the people at large. The people of the city of Buffalo pay 5 cents 
for car fare. They do not get six tickets for a quarter. Men in the 
city of Buffalo have written me, and I have letters here I could read 
to you to-day, speaking of the scant use of electricity in the city of 
Buffalo because of the high rates charged. A friend of mine, a busi- 
ness man in the city of Bufl'alo, told me not six months ago that he 
had bought a gasoline engine because it cost too much to run an 
electric motor under the conditions that exist. 

The prices charged for electric traction at Niagara Falls on both 
sides are not low prices. They are high prices; from two to four 
times the prices charged in other parts of the country for the same 
service. 

That this fear is not unfounded may be considered again from an 
equivalent instance. The Falls of Montmorency, near Quebec, have 
all been converted into electricity, and the scenic features have abso- 
lutely disappeared. In a speech made by Mr. J. W. Lj^on, the secre- 
tary of the Western Ontario Municipal Niagara Power Union, 
another organization designed to free the jDeople from the grasp of a 
monopoly, this statement was made : 

Now, what can we expect from private development of our water power? 
Take Montreal as an example. At first there wei*e three competing companies 
and power was sold at about .$40 per horsepower. But. as is always the case, 
they amalgamated, with the result that power was advanced to from .$50 to $150 
per horsepower ; and it is openly stated, and not contradicted, that they are 
now paying 7 per cent dividends on $24,000,000 of capital, with only $7,000,000 
invested. It is simply a question of what the tratfic will bear. As cheap as 
coal or a little cheaper, is their motto. Now, what is electrical energy worth 
under such conditions? It is of little value to the public; nearly all the value 
belongs to the companies selling the power. What can Toronto expect from 
Niagara under company development? There is, first, the Electric Development 
Company, then the Transmission Company, then the Distributing Company, then 
the Street Railway Company. Toronto has had enough experience with the 
Street Railway Company to know Avhat to expect. Practically the same men 
control each and all of the above-named companies. Each company is expected 
to water its own stock, each would pay large dividends, and the foundation of 
all is Niagara Falls. 

That is the fear of our neighboring government on this subject, and 
they have taken action, as I haA^e said; and in the Canadian Munic- 
ipal Journal for this month there is an account of the meeting of a 
large number of officials of Canada, gotten together to consult about 
these very exactions. If all this power is admitted into the United 
States, we are simply fostering the growth of a difficult and unpleas- 
ant monopoly. 

It may be that one of the gentlemen Avho shall follow me will have 
something to say about the way in which one of these has been 
fostered. 

Under section 4 of this act the President is respectfully asked to 
open negotiations with the Government of Great Britain " for the 



20 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

purpose of effectually providing, by suitable treaty with said Gov- 
ernment, for such regulation and control of the waters of Niagara 
River and its tributaries as will preserve the scenic grandeur of 
Niagara Falls and of the Eapids m said river." 

It is known that such negotiations have been opened and it is well 
known that little progress has been made. Why should the Dominion 
of Canada consider or consent to a treaty for this purpose when the 
United States is proposing to participate, to the fullest extent, in the 
proceeding for the destruction of the scenic grandeur of the Falls on 
her side? We do not go to Canada with clean hands in that conten- 
tion. The purpose of the act to facilitate the negotiation of a proper 
treaty will obviously be fostered by the exclusion of the electric 
power it is now sought to have admitted. 

A commentary on that, Mr. Secretary, you will find in the recom- 
mendation of Captain Kutz, that one of the contending companies 
shall be given a less amount of horsepower than another. With the 
merits of this controversy I have nothing whatever to do; but with 
the fact that there is a plain implication there of an objection on the 
part of the Dominion of Canada, we have something to do. 

I want to read you just a brief extract from a clipping from a 
Canadian paper of last week, which bears strongly on this subject, 
showing just exactly what Canada thinks of this possibility of fos- 
tering the companies on the Canadian side Avhicli have American 
capital to back them, and shutting out the Canadian capital. The 
editorial is from the Toronto, Canada, News, of November 2, 1906 : 

DISCRIMINATION AT NIAGARA. 

There is an indication of discrimination against the Canadian development 
Arm producing electrical energy at Niagara Falls, and we believe the facts in 
the case are worthy of full publicity. 

Anxiety for the preservation of Niagara Falls as a great national spectacle 
caused the passing at Washington of the Burton bill, which restricted the 
withdrawal of water for power purposes from the American side of the river, 
and fixed the maximum amount of power which could be imported from the 
Canadian side at 300,000 horsepower, provided the Falls were not appreciably 
impaired in producing this. The arrangement for the present is that 160,000 
horsepower may be imported, and if this does not affect the Falls to any impor- 
tant extent, further permits may be granted. 

The whole question as to granting temporary permits was left in the hands 
of the vSecretary of War. Mr. Taft visited the three plants on the Canadian 
side of the river, and ordered a report prepared by Captain Kutz. a^United 
States Army engineer. In the meantime, also, he promised to consult with the 
American members of the International Waterways Commission in reaching 
a decision. A draft report has been prepared whereby the Canadian Niagara 
Power Company and the Ontario Power Company will be permitted to export 
to the United States 60,000 horsepower each. The other concern, the Elec- 
trical Development Company, will be allowed an exportation permit of 37,500 
horsepower. 

Now. it is a well-known fact that both the former companies are the prop- 
erty of American capitalists, while the Electrical Development Company is 
purely Canadian. Incidentally it may be stated that some of the methods of 
the Electrical Development Company did not appeal to The News. Yet, 
although we have been vigorous in our deiuniciation of certain phases of policy 
adopted by the Pellatt-Nicholls syndicate, it must be admitted that the company 
has shown commendable enterprise, farsightedness, and unquestioned business 
acumen. 

Moreover, it is a Canadian company, root and branch, and we are unable to 
see why it should be treated unfairly by the United States. A father may 



TEAKSMISSION" OP POWER FROM THE NIAGARA RIVER. 21 

thrash one of his children in tlie privacy of his baclv yard, but he will object 
if the man next door offers assistance. 

The arsniment which induces the peculiar allotment to which we have re- 
ferred is a curious one. Captain Kutz in his report points out that the three 
companies are (m an equal footing as to capital invested, ability to complete 
works and transmit power, therefore he says that there is no reason for dis- 
crimination except in regard to the relatiye ability of the companies to com- 
mand the Canadian market. He and the Waterways Commission say that 
the Electrical Development Company is likely to sell at least 25,000 horse- 
power more to the Canadian users than the other companies will, and for this 
reason they believe the Canadian company should not be allowed to export as 
much to the United States. 

This is curioiis logic, if it be logic at all. It can be followed out to very 
extraordinary conclusions. Suppose that in the actual working out it so hap- 
pened that the Ontario Power Company were to get a Canadian market equal 
to that of the Electrical Development Company? In that case the amount to be 
exported b.v the American company should be reduced to .37,.500 horsepower. 

But that is no more likely than in a state of sobriety to see two moons in 
the sky. Stripped of all pretended ar.gument, which is no argument, the Ameri- 
can authorities propose to allow the American companies on Canadian soil 
using Canadian water to grab three-quarters of the export business, and to 
grudgingly permit the Canadian company the other quarter. This is not " a 
square deal,'' and if such is to be the final action of the Secretary of "War 
it is not in accordance with the reputation 'Siv. Taft has attained as a broad- 
minded, just man, able to see all sides of a dispute and bold enough to do the 
right thing under all circumstances. 

One of the main clauses in the waterways treaty now under consideration 
has to do with limiting the use of water for power puri)oses to the existent 
plants. The Canadian members of the Commission should be slow to accept 
such a clause until it is made certain that the Canadian company shall not be 
the object of any unfair discrimination. It should be share anxl share alike. 
All the companies on Canadian soil operate on practically the same terms. 
There is no discrimination by the Ontario government in favor of the Cana- 
dian company. It is fair to insist that the United States should not discrimi- 
nate in favor of the American companies. 

I read this extract only to show a bearing on this proposition of a 
treaty. If we are insnlting, as one might say, their capital, how can 
we expect Canada to join hands with us diplomatically in the erection 
of a treaty which shall preserve this scenic Avonder? T respectfully 
refer you to Secretary Root for a personal talk upon this matter. 
He has expressed himself upon it within a recent time. 

Secretary Taft. I have had a conference with him. 

Mr. McF.\RLAND. I am glad to know it. 

The various briefs submitted by the companies contending for the 
issuance of permits to transmit poAver into the United States do not 
agree Avith the reconmiendations of Captain Kutz, either in jDropor- 
tion or in amounts. A A^ery large excess is asked for, and there are 
suggestions of international complications, as evidenced in the briefs 
mentioned. We submit that the simplest and best Avay, the Avay that 
can not be criticised at all except from the standpoint of corporate 
interest and personal and private gain, is to shut it all out except the 
poAver noAv being actually transmitted, and thus free the hands of 
this GoA^ernment in its negotiations Avith Canada for a treaty. 

In conclusion, Mr. Secretary — and I have taken A^ery nuich too 
much of your time — and in vieAv of these statements, Ave urge you, in 
the exercise of the discretion A'ested in you, and in compliance Avith 
the plain intent of this act, as AAell as AA-ith the underlying purpose of 
the people of the country, not to issue permits for the transmission 



22 TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 

of electric power into the United States except for the exact amounts 
of such power as are now being so transmitted, and to enforce such 
exchision by suitable regulation and inspection, under the authority 
granted in the said act. 

You will note, Mr. Secretarj^, that we have there agreed that what 
is noAV coming in may come in*. We do not want to interfere in a 
drastic way. We believe the people would stand for what has been 
done, if further inroads are stopped. We urge and contend that the 
thing must stop now, and that these vast extra investments that are 
being projected, of which the newspapers are full, should be called 
to a halt by notice given that under the life of this act no further 
electricity will be admitted. 

Mr. Secretary, may I perhaps have the privilege, unless you should 
consider it improper, of reading to you one or two short letters of the 
leaders of public opinion in this country? 

Secretary Taft. I have no objection to it, if they are founded on 
the reports and the facts. The truth is, Mr. McFarland, as every- 
body knows, either a citizen of the United States or anyone else inter- 
ested in the welfare of the people of the world, is in favor of preserv- 
ing the integrity of Niagara, and if that is all these letters amount 
to, I think it is only a work of supererogation to bring them to the 
attention of one who is charged with the responsibility of construing 
a rta:ute and finding out what the facts are, and acting with respect 
to the facts, not with respect to a sentiment that is not based upon a 
knowledge of the facts. That is a distinction I tried to bring out in 
the letter I wrote. you the other day. 

Mr. McFarland. That is a very proper distinction, Mr. Secretary, 
but I really must differ with it to this extent, that precisely the same 
feeling or sentiment, whatever it is called, that existed six months 
ago, when this act was called into existence, exists now, and these 
manifestations are i^recisely the same as those which were made. 

Secretary Taft. And I will fully concede, if it is necessary to con- 
cede — it seems to me it goes without saying — that the act was passed 
to preserve Niagara Falls, and prevent its destruction, and to pre- 
serve its volume and integrity ; but that is a very different thing from 
saying that the act did not contemplate the exercise of a discretion 
with reference to what ought to be done with existing investments. 
How far the allowing of those investments to go on can be reconciled 
with the preservation of the Falls, of course, proceeds, as you must 
admit, on the question of fact; does it not? 

Mr. McFarland. Yes, sir. I fancy it is your right, though, in 
judging upon the question of fact, to inform yourself as to all the 
circumstances. 

Secretary Taft. That is what I am trying to do. 

Mr. McFarland. And 1 fear I am not aiding you very much. 

Secretary Taft. I think you are. 

INIr. McFarland. If I may do so, 1 desire to read these two letters, 
one from Mr. Edward Bok, who reaches four or five million people, 
and whose opinions are distinctly entitled to respect, and the other 
from Mr. Norman Hapgood. Mr. Bok, in speaking of what he has 
heard from his people, says: 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 23 

November 1G, 190G. 
Mr. J. Horace McFari.and. 

Dear Mr. McFarland: I sincerely hope tliat there is nothing in tlie disquiet- 
ing reports which have come to me as to the possibility of the admission of 
Niagara-made electricity from Canada. 

Surely Secretary Taft must know how the American people feel about it. If 
he (.-ould have Iteeu in my place during the time of our treatment of this ques- 
tion and could have seen the hundreds of letters that i)oured in from the people 
all over the country, he vrould need notliing more to convince him that the 
preservation of the Falls in all their beauty and magnificence is a subject very 
close to the people and one on which they strike no uncertain note. It seems 
absolutely inconii)rehensible to me that there should be the slightest suggestion 
of two sides to this question since the other side can be only one of commercial 
possibilities, and material people as we are that did not weigh an ounce with 
the American jioople when they spoke to us on this question. They simply 
said : " We do not care how valuable the Falls may be for power purposes , 
we want them left alone." That is the whole crux of the matter. 
Believe me, very cordially, yours, 

Edward Bok. 

Mr. Norman Hapgood, the editor of Collier's Weekly, says: 

November 14, 1906. 
J. Horace McFarland. Esq.. 

American Civic Asffoctation, Harrisbiirg, Fa. 

Dear Mr. McFarland : I regret very much that I did not know about the 
hearing on the 20th in time to write a strong appeal to our readers to send 
their opinion to Secretary Taft. 

In spite of the very powerful men who will present the most plausible argu- 
ments at the hearing, in favor of the commercial interests, I am full of the 
belief that Secretary Taft will see the facts as they are and act upon them 
without fear. His record in the Philippines is one of the most inspiring encour- 
agements the country has had toward standards of conduct higher than imme- 
diate money gain for ourselves. AVe can well afford to preserve Niagara for 
posterity ; and any man who helps to do so will be of greater aid to the country 
liy his cxanq.)le than he can possibly be by aiding a few power companies to 
extend their activities. 

I am in no sense qualified to speak as an expert on this subject, but I have 
been thrown in contact with a number of men who are so qualified, and I have 
not met one who had studied the question deeply and who was free from any 
financial interest in it, who did not look with discouragement and alarm upon 
such use of the Falls as is now being permitted, and as will be urged with 
skill and ruthless self-Interest by the lawyers and other representatives of the 
power companies. 

Speaking, therefore, as one whose constant duty it is to study public opinion 
as extensively as possible, I add the plea of this newspaper to whatever other 
appeal you may have, most emphatically for a decision that will put this 
country in the position of choosing permanent good and uplifting influence, even 
against great opposition, instead of seizing upon immediate convenience and 
following the line of least resistance. 

Yours, very sincerely, Norman Hapgood. 

Mr. Secretary, if I may venture to allude to the connnunications 
yon have received here, yon will bear me out in saying that they have 
been from governors. Senators, Representatives, judges, doctors 

Secretary Taft. Yes; I have the Chief Engineer's office full of 
them, and among them is a letter from my mother and my aunt 
pleading with me to preserve Niagara. [Laughter.] AVhat I meant 
to say to you, Mr. McFarland, in that letter I Avrote you, Avas this, 
that those things do not reveal to me anything I did not know 
before. 

Mr. McFarland. I am very glad of that, sir. 



24 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft. They do not assist me in the slightest in coming to 
a conclusion, because the conclusion -must be founded on the meaning 
of Congress under the statute and on the facts that are to be found. 
That is what I meant to say. That is the reason I wished you to 
come here and make an argument, and not rely on that toil of postal 
cards and other communications, including some family epistles. 

Mr. McFarland. Have T in some sense aided in the matter of 
bringing it before you, then, independent of the postal cards? 

Secretary Taft. You have certainly made it a matter of thought. 
I can state that. 

Mr. McFarland. Mr. Secretary, it was rather a pleasure to me to 
say that this volume of communications you have received adds to 
" the great army of meddlers," as we are called in an official communi- 
cation, which has been received, I believe, from the city of Niagara 
Falls. 

Secretaiy Taft. You understand, Mr. McFarland, I do not care 
what you are called, whether you are called meddlers, or what. You 
have a right to be heard ; but the question of the rules of decision 
that are to prevail in reaching a conclusion is of course a matter that 
must de]3end upon an examination of the statute and what my duty 
is in the premises. 

Mr. McFarland. Would you prefer to hear from another of our 
representatives ? 

Secretary Taft. No ; I think j^ou are entitled only to one argument 
in the close, and those who desire to be heard on your side ought 
to proceed now, with the exception of one whom you may select for 
the close. 

Mr. McFarland. Mr. Woodrulf will take care of the close for us, 
and, I think, if Judge Potter woidd present the case of the New York 
State reservation at Niagara it would be wise. 

STATEMENT OF JUDGE A. K. POTTER. REPRESENTING THE NEW YORK STATE 
RESERVATION AT NIAGARA FALLS. 

Judge Potter. Mr. Secretary, as one of the commissioners of the 
State reservation at Niagara Falls, I am here to oppose this applica- 
tion. I do it largely now, as the matter has come up here, on the 
ground that it is inopportune. I recognize the fact that there is 
ample authority for you to exercise your discretion. Whatever the 
rights of th6 United States may be in this question, you are delegated 
and authorized to take all these matters under advisement, and exer- 
cise your discretion, and do that which is right, and we have no 
doubt it will be done. My remarks will be addressed to your discre- 
tion, and what should guide and aid you. 

The act under which you are proceeding to-day was a provisional 
act, really. The purpose of Congress, if I interpret it correctly, 
was to maintain the statu quo until such time as the two governments 
who really have the final say in this matter could get together and 
determine what ought to be done; and I think that your duties in 
the construction of this act lie just there, in seeing what best will pre- 
serve the statu quo and leave the situation open for discussion and 
adjustment between the two great countries who are interested. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 25 

NoAV, the United States undoubtedly has a duty, and had a duty 
when this act Avas prepared, under the treaty with Great Britain, and 
under the ordinance establishing the Northwest Teri'itory of 1789, 
which devolves upon the United States the protection of the lakes 
and connecting rivers and tributaries to them. 

That has been discussed in the United States court, in a case in 
Ohio, where the question of the power and duty of the United States 
in protecting these waters and what their duty should be was under 
discussion. It was in one of the inferior courts of the United States 
and arose, I think, upon either an application for an injunction from 
interfering with one of the tributaries to Lake Erie, or else on a 
motion to vacate the injunction. However, it was a matter for the 
United States as a custodian of the waters; but the United States 
is but one custodian of the waters of the Niagara River. I am not 
going to elaborate upon that. It has been a matter of discussion 
heretofore before the Committee on Rivers and Harbors, where an 
ex- Attorney-General of the United States took that position, and it 
is discussed in a brief by Mr. Gregory, who, I think, is present here, 
which is among the proceedings of that hearing in great detail. 

But I wish to urge upon you this, that in the exercise of your dis- 
cretion and your judgment it is to preserve the statu quo in such con- 
dition as will best lead, harmoniously, to a solution of the question 
which these two countries must eventually meet, if it is ever closed. 
I have said that the United States is but one of the custodians. 
Canada, or Great Britain, is another. The State of New York, we 
all know, owns the bed of the river. It owns all the rights that a 
riparian owner may have in navigable streams. It goes no further 
than that, and the United States is simply a custodian of the highway. 

I am not going to urge here the fact, which I believe to be the law, 
that the United States in that capacity has no power and no right to 
have any way, except as it alfects the right of navigation ; but I say, 
with this rule of law in mind, that every court that has passed on the 
question has held that the fact that the navigation of the river at this 
point is interrupted makes no diiference in the question, and does not 
divest the United States at all of their authority over the river from 
its mouth to its source. 

Secretary Taft. Judge, I suppose that which you are discussing 
relates only to the permits atfecting the withdrawal of water from 
this side ? 

Judge Potter. No. 

Secretary Taft. You would not contend at all that the power of the 
Government was not absolute to exclude electricity from the other 
side ? 

Judge Potter. No ; that is not what I am coming to, and it is not 
the purpose of my argument to discuss that. I am coming to another 
proposition. 

Now, the United States being one of the joint custodians, the other 
one has the same rights, not onl}^ to their half or side of the river, but 
it is a fact that each of them is a holder, and the British Government 
has the right to say as to the length and breadth and Avidth of the 
river, what mav be done so far as it may be aifected as a navigable 
stream, and rei:)resenting the rights of the people, or rather subserv- 



26 TKANSMISSION OF POWER FROM THE NIAGARA RIVER. 

ing the rights of the people in it as a highway. Now, let us see. If 
this was simply the question of admitting into the United States 
some j30wer from Canada, the State Reservation Commissioners 
would liaA^e very little interest in it; but it reaches further than that. 
If you permit these gentlemen to bring into this country this power, 
what happens? Why, it is spread out all over the State of New 
York, and perhaps into other States. Large investments are made. 
The Canadian people must make large investments in order to intro- 
duce it into the United Slates, and to provide it. Now, what is the 
situation and what will it be? It is idle, I think, to talk about the 
mouths of these applicants being closed. Theoretically I agree with 
you, Mr. Secretary, that they ought to be closed, but they will not be 
closed. 

We know too well what has happened, and what will always hap- 
pen, that, having this possesion, which is sometimes called nine 
points of the law, they will insist that they onght to be recognized to 
retain it. It is not a question of the United States alone, nor chiefly, 
that I have in mind. Suppose the sentiment upon the Canadian 
side is what we seem to find it upon the United States side, that the 
large majority of the people in each country want Niagara Falls pre- 
served, preserved at least just so far as it is ]30ssible at this time, and 
to protect the rights of the people who have vested rights, these rights 
that we hear about being vested. They never are vested as against 
the United States in this case; but rights of a kind, possessory rights, 
Avhich they have obtained. 

Sup])ose the sentiment upon the Canadian side is just as strong as 
here, and they want to curtail the taking of water; they want 
to curtail it just as far as it is possible. ^A^iat will you have? You 
will have an appeal from these interests on the Canadian side and 
from the American side, I am not criticising these gentlemen who 
are interested in these large investments. They are doing what other 
people do, trying to get what they can; and we are here simply as 
representatives of the State of New York to say that that good thing 
shall be limited? A^^iat Avill be tlie answer? A^liat will they say if 
the Canadian government should undertake to restrict them? 

Secretary Taft. The State of New York has not imposed any great 
limitations, has it ? 

Judge Potter. No; but the sentiment of the State of New York 
has been shown by the recent action repealing certain charters or 
limiting them. That is all we are after. That is our purpose, to 
limit this as far as possible. 

Secretary Taft. There was not any effort at limitation until this 
Congressional action was taken, was there? 

Judge Potter. No; that is true. These gentlemen had their own 
Avay in getting their rights, as other people would have done under 
the same circumstances, I presume. 

Secretary Taft. I asked that question with a view of knowing 
whether any of the people who are investing money there had any 
reason to suppose there would be a limitation until Congress had 
acted ? 

Judge Potter. They had no reason, except that I assume they knew 
what the law was, and what might meet them in the future, and they 
took their chances. That is all. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 27 

Secretary Taft. The charters which have been granted were very 
much more extensive in the amount of water to be used than the 
water that is now actually used, were the}^ not? 

Judge Potter. There is a limit now, I believe, in every case. On 
the New York side I believe that is a fact. There were some unlim- 
ited charters that have not been kept alive or have been repealed. It 
is possible that some that remain are unlimited — I am not sure — but 
those who are drawing water are limited, I believe. Now, the appeal 
would be made to the Canadian government by these people, who 
would say : " We have invested our moneys in this country, in 
Canada. We have invested in the United States. We have delivered 
power to them and they have invested large sums of money." Now, 
it shuts the door, almost, as we know, not in theory but in fact, 
which is more important than theory in these particular matters. 
Now I say that the comity of nations and the courtesy that is due 
them should lead you to be very cautious, as I have no doubt you 
will be, in maintaining this status quo which this legislation is in- 
tended to accomplish — simply to leave it where it was, not interfering 
with the projDerty rights, or possessory rights any further than is 
necessary until such time as it could be finally adjusted with the 
powers which have the control of the matters finally. 

That is the question, as it strikes me, that both nations should be 
left unhampered so far as it is possible. If there was an emergency, 
if there was an exigency existing on the side of these gentlemen 
whereby they must have it at all events or something was going to 
happen, they would have a little stronger appeal to 3'our sjnnpathies, 
if not to your discretion; but there is no emergency here. This 
matter, it is presumed, will be disposed of, and certainly it was the 
intention of the act that it should be disposed of within the three 
years from the time the act was passed. My appeal to you is that 
you so exercise your discretion and your judgment that the purpose 
of this act shall be best preserved and conserved, and that the matter 
shall stand in statu quo until such time as it can be finally settled. I 
appeal to your discretion. I recognize your authority. I recognize 
your right and your justification to do that which in your best judg- 
ment should be done. I simply appeal to you on behalf of the State 
commission to exercise that discretion in preserving one of the grand- 
est things on earth, one in which the State of New York has invested 
millions of dollars, one which they are struggling now, I am glad to 
say, to protect. I am willing that ever}' just thing should be done 
in behalf of these gentlemen, but justice does not require to-day that 
this application shoidd be granted. 

]\Ir. INIcFarland. I Avould like to introduce next Mr. F. W. Stevens, 
who represents a committee of the Chamber of Commerce of the city 
of New York. 

STATEMENT OF FRANK W. STEVENS, REPRESENTING A SPECIAL C0M3IIT- 
TEE OF THE NEW YORK CHAMBER OF COMMERCE. 

Mr. Stevens. Mr. Secretary, I appear here on behalf of Mr. Francis 
R. Appleton, Mr, Charles M. Doav, and Mr. George Haven Putnam, 
a special committee appointed at a regular meeting of the Chamber 



^8 TRANSMISSION OP POWER FROM THE NIAGARA RIVER. 

of Commerce in the city of New York, to represent that body in the 
matter of the preservation of the Niagara Falls. 

The Chamber of Commerce last February passed very strong reso- 
lutions upon the subject of the preservation of the Falls in all of their 
grandeur and beauty. I have the resolution here, stating that it was 
opposed to the use of the waters of that stream for manufacturing 
purposes at the Falls, and it is on the strength of that resolution and 
the instructions of this committee that I am here to oppose at this 
time the grant of any permit at the present time for the introduction 
of electricity from Canada. 

Now% the remarks you have already made have narrowed the 
field of discussion very measurably, and the remarks which Judge 
Potter has made have to some extent anticipated the facts which I 
shall endeavor to present to you; but each gentleman, of course, has 
his own way of presenting the same idea, and therefore, in different 
language, I shall present perhaps the same ideas to some extent that 
Judge Potter has presented, but before doing so I wish to say that 
having been for some j^ears connected in a very moderate wa}^ with 
the commissioners of the State reservation as counsel in certain 
minor matters, that the commissioners of the State reservation at 
Niagara have uniformly and consistently from the first, in the State 
of New York, opposed all grants on the part of that State to power 
companies to take water from the Niagara River. 

The proceedings of that commission are very full upon that i^oint, 
and I do not know of any application — there may have been one or 
two minor ones — but certainly all of the important ones were opposed 
with all of the vigor that commission could bring to bear, because the 
gentleman avIio was the president of the commission at the time all 
these charters were granted by the legislature, Mr. Andrew H. Green, 
now deceased, was a man whose heart and soul were thoroughly in 
the work of preserving w\\ the scenic beauties of Niagara Eiver 
unimpaired. 

Now, sir, to come down directly to the statute under discussion, 
there is no question, as you have already stated, in various ways, as I 
understand it, that the principal obje^-^ of this act is to preserve un- 
impaired the falls of Niagara. 

Secretary Taft. It reads "An Act for the control and regulation 
of the waters of Niagara River, for the preservation of Niagara 
Falls." 

Mr Stevens. And by the report of the Committee on Rivers 
and Harbors of the House of Representatives, so far as that report 
could give any instructions to you, I believe you are directed to make 
a strict construction of the provisions of the bill. Now% it is un- 
doubtedly true that Congress recognized that there were serious diffi- 
culties of a very gi^ave nature with regard to utterly stopping the 
diversion of waters from that stream. It is undoubtedly true that it 
did not feel that it could by a bill or by its legislative enactments 
control all those questions, and for that purpose, of having those 
questions settled fairly and justly, the subject was committed to you 
and your discretion. The bill confers large discretion upon you, 
and the question at this time is, what consideration should influence 
your discretion in the matter. It is to those questions that I propose 
to address myself. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 29 

I do not deny, sir, but what gentlemen who have invested their 
capital in the United States are entitled to great consideration, and 
I i^robably would give to them as great consideration as any person 
in this room, as will appear directly from the course of my remarks. 
I do not deny, sir, but what the demands of people residing in the 
vicinity of Niagara for power are entitled to some consideration. 
What weight is to be given to them is another question. I do say 
that the primary purpose of the act being to preserve the waters of 
Niagara unimpaired, that that is the paramount purjwse of the act, so 
far as it can be considered without doing actual injustice to people. 
Now, if it comes to the question of how much power is to be intro- 
duced into this countr3\ whether 157,500 horsepower, or 3G0,000 
horsepower, that is a matter of perfect indifference to me on this 
occasion, because it is a matter of mere detail ; and upon this ques- 
tion your information and your knowledge will be based upon official 
reports, and will be infinitely superior to anything I could say to you. 
There is another consideration, and that is how far the diversion 
from the stream of something like 13,000 cubic feet per second, which 
I believe is 157,500 feet recommended, I believe by Mr. Kutz, will 
injure the scenic beauty of Niagara Falls at this time. To that ques- 
tion I do not propose to address myself. Naturally, from investiga- 
tion and from personal observation, I have very strong views upon 
that question, but that is a matter upon Avhich you can obtain a great 
deal better information than anything that I can say here. But the 
point to which I wish to call your attention is, what effect beyond 
these two considerations it will have upon this matter and upon this 
controversy, if you at this time grant any permits whatsoever. 

Now, just a word, sir, with your permission, upon the question of 
how your intent is to be guided upon this act. 

I do not say this hoiking to enlighten you upon the subject, because 
undoubtedly you have given the subject far more consideration than 
I have, having the burden devolving upon j^ou to make the decision. 
T merely state what I view to be the proper interpretation of the act, 
so that you may be possessed of my views, and see how I look at it, 
for the purpose of saying whether the views I shall present here have 
any force or effect. In the first place, you are not directed to grant 
any permit whatsoever, and the act is clear upon that point. In the 
second place you are, in the fifth section of the act, given explicit 
poAver to revoke any permit given, showing that contingencies might 
arise which would indicate that you had inadvertently or by mistake 
granted a permit which should not have been given. 

Now, for what possible reason would you wish to revoke a permit? 
The only possible reason that I can conceive of is that you have 
granted a permit Avhich, unknown to yourself, has to some extent 
impaired the grandeur of Niagara Falls. AMienever you grant a 
permit for 1 horsepower or 160,000 horsepower, you unquestion- 
ably do something l)eyond granting that permit, ft has a tremen- 
dous effect upon the future of the question, and it is to that future 
that I desire to call your attention. In the first place, I say that 
every permit which you grant here, although in theory of law it is 
revokable, is absolutely irrevokable. I say that will be the result. 
They fasten upon that stream for all time — to make the diversion of 
that amount of water. Why? "Wlien this bill was passed, and when 



30 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

you took upon yourself the burden which it imposed upon you, you 
found existing upon the American side two power phmts — the Niag- 
ara Falls Power Company and the Niagara Hydraulic and Manufac- 
turing Comi^any plant. The bill absolutely shut them oft', as I con- 
strue it, from diverting any waters. 

Have you, sir, for an instant — of course, I am not asking you for 
an answer at this time at all, but am appealing to your conscious- 
ness — have you for one instant considered the possibility of shutting 
those plants oft' from exercising the powers they have been exercising ? 
I apprehend not. Those two plants have never been in a moment's 
danger of being shut off under that act, and they never will be in a 
moment's danger in all the future from any legislation of Congress. 
The res])ect for the investment of capital in this country is too great 
to permit any such thing as that. Nobody asks it. Certain gentle- 
men do want the stream unimpaired, but, as Mr. McFarland has very 
fairly said here, they do not want it done except by paying these 
gentlemen for their investments. 

When you grant any permit in this case you sanction, by law, the 
use of those waters irrespective of the effect upon the v, aters of the 
stream. You not only sanction the investment of the capital which 
is made by these gentlemen, but you are encouraging the investment 
of other capital throughout the United States. 

You are encouraging, sir, the building of lines of street railroads; 
you are encouraging the building of factories; you are encouraging 
the settlement of artisans, the building up of homes. We say, sir, 
that neither you nor any other man of fairness and justice in this 
country would ever for a moment contemplate taking back from those 
people their means of subsistence, their means of transportation, 
their means of manufacturing, which have been once given in the 
exercise of your discretion. When you grant this right, sir, you 
say to these people '' Go on and build factories." Otherwise the right 
is of no value. You say " Go on and build street railroads, dependent 
upon this source of power," and I ask you, sir, and I ask every fair- 
minded man if, when you grant 157,500 horsepower to come into 
this country, if that is ever going to be deprived of coming in here 
by any act of yours or by any act of any successor or by any act of 
Congress ? 

Secretary Taft. Does not your argument carry you a little beyond 
the point to which you use it? 

Mr. Stevens. Not in my judgment; it does not, sir. 

Secretary Taft. This money which has been invested on the other 
side has been invested on the faith of a free opportunity to import 
that electricity. The recommendation of Captain Kutz was only as 
to money actually invested or money actually involved in invest- 
ments. As, for instance, I assume if a man builds three stories of a 
house, the money required to put on the roof is, so far as this discus- 
sion is concerned, as much actually invested as if it had been actually 
expended. Now, if it be true that this money Avas invested on the 
faith of a power to introduce this electricity into the covmtry, are not 
the arguments in favor of allowing them to come in just as strong as 
they would be in favor of maintaining the permits, as you say they 
would be maintained were I to grant them, and the workmen's build- 
ings were to be erected, and all the other plant added Avhich you sug- 
gest would be added under those permits? 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 31 

Mr. STEVE^'S. It may be, sir : it may be. 

Secretary Taft. In other words, the arguments you are using, strong 
as the,y are, in favor of maintaining those permits if issued, are not 
the same arguments strong to compel the issuing of permits if the 
money has ah-eady been invested on the faith of the power to introduce 
electricity? I mean money invested before this act was passed at all. 

Mr. Stevens. I do not attempt to minimize the strength of those 
arguments in the slightest. I propose to meet them fairly. I admit 
there is a strong argument which can be made for the introduction 
of electricity at this time, and it is one of those cases Avhere there are 
complicated views which can be taken 

Secretary Taft. Was not what Congress wanted to do to accom- 
plish a reconciliation of those interests as far as they thought the 
Secretary of War could do it? 

Mr. Stevens. What Congress wanted to do was to shift upon your 
shoulders the settlement of difficult questions. 

Secretary Taft. We will concede that. I do not know that Con- 
gress would, but I will concede it. 

Mr. Steveks. I quite agree that the point that the Secretary admits 
is correct. Now, I have conceded, and propose to concede, the strength 
of the argument that you have suggested. I do not deny it, sir, but I 
wish to point out the strength of the countervailing argument, and 
then it is for you to decide which one is the stronger, and which must 
influence your decision. A man does not help his cause b}^ belittling 
his opponent's. 

Secretary Taft. I agree with you. 

Mr. Stevens. He does better by recognizing fulh^ and fairly the 
strength of the position of the other side. 

Secretary Taft. Because he then becomes helpful to the tribunal 
which has to make the decision. 

Mr. Stevens. That is the instruction which I have in my pocket 
from the chairman of the committee, saying: '" Present considerations 
which will be helpful to the Secretary if you can." That is what I 
am here for: whether I shall succeed or not is a vastly different 
question. 

Secretary Taft. I hope you ma}". 

Mr. Stevens. I will try to do so, by advancing one or two more 
considerations without occupying an undue length of time. 

The first argument is this, that by granting these permits you fasten 
for all time upon this country and upon Canada the diversion of the 
amount of water which is suggested, or whatever you grant; and you 
must permit me to say that if your argument — I beg j^our pardon, I 
did not intend to say your argument 

Secretary Taft. That is right. My tentative argument, you could 
put it. 

Mr. Stevens. I do not mean to say that you have any argument. 
That was a slip of the tongue. But where is the logical end of the 
argument which you have suggested? According to the reports of the 
International Waterways Commission these gentlemen have invested 
in plants and I have seen the plants with my own eyes and admire the 
great engineering skill and tremendous scope of the brain which 
planned them. They have invested there in plants which are capable 
of producing, if the report is correct, 415,000 horsepower. If they 



32 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

are entitled, by reason of having invested capital without objection 
on the part of the United States, to divert water, which will produce 
160,000 horsepower, why are they not equally entitled to divert the 
whole amount? Why are they restricted by act of Congress to 
360,000 horsepower? There must be some reason — showing that in 
the eye of Congress, and in your own eye, if I read aright what you 
say, they are not entitled to the full benefit of the capital which they 
have invested. I can not see Avhere the line is drawn. If they are 
entitled to any recognition at all they are entitled to the full amount. 

Secretary Taft. Is that quite true? 

Mr. Stevens. Possibly not; it looks to me that it is, though. 

Secretary Taft. Suppose the amount which they have invested 
would result in a reasonable profit if they are allowed 160,000 horse- 
power, or that division that is suggested by Captain Kutz. That is 
a condition, an actual condition, and if you allow them a reasonable 
profit on that, have they any right to ask that they be allowed to 
invest additional capital, beca;use in their original project they 
thought they might have all that they could possibly and profitably 
use? 

Mr. Stevens. Well, I may be mistaken as to the fact, because I 
have not seen the report; and if I am mistaken as to the fact, what 
I say goes for naught. I understand the recommendation to be 
60,000 horsepower to the Canadian Falls Power Company, 60,000 
horsepower to the Ontario Power Company, and 37,500 horsepower 
to the Electrical Development Company. 

Secretary Taft. I think those figures are practically correct. 

Mr. Stevens. I also understand from this report that at the present 
time the total actual demands which would be supplied by all those 
companies in Canada is about 50,000 horsepower, and what I say is 
based upon that understanding of fact. 

Secretary Taft. Yes. 

Mr. Stevens. Does anybody pretend to say that the Electrical 
Development Company, with all its tremendous investments there, 
can make a reasonable profit or any profit upon 37,500 horsepower ? 

Secretary Taft. I assume that Captain Kutz's theoiy was that, 
added to what it has on the Canadian side, it can. 

Mr. Stevens. I do not know what it has on the Canadian side. 

Secretary Taft. Twenty-five or thirty thousand, is it not? 

General Mackenzie. Somewhere between 35,000 and 40,000. 

Mr. Stevens. Can they make a reasonable profit in the other com- 
jDanies with 60,000 each? 

Secretary Taft. It is my understanding that that is Captain Kutz's 
idea. 

Mr. Stevens. That is a question of fact that I am not prepared to 
discuss. 

Secretary Taft. I think Captain Kutz thinks they can. That is 
the difference. 

Mr. Stevens. That is a question they will talk about. 

Secretary Taft. Yes ; we shall hear that. 

Mr. Stevens. You will hear that later. I, of course, shall not 
anticipate, although I know it will be impossible for me to reply; 
but I should certainly ache to do so on certain propositions. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 33 

Let US take into consideration at this moment another view of the 
question, and that is this : There are other people who have invested 
money, or they say they have, upon the strength of supposing that 
nobody would interfere with them — not that anybody has en- 
couraged them; not that anybody has done anything which in the 
eye of equity law would constitute an estoppel, but simply wnthout 
having their attention called to the probable effects of this Avork 
they have ignorantly stood by and have not objected. That does not 
constitute an estoppel by any means. But you must remember, sir, 
there are two classes of individuals in this country, or two parties, 
would be the more correct expression. There is one party which, I 
think, embraces the great majority of the people of this country, and 
to which I most certainly belong personally, which holds that the 
Niagara Falls should be preserved unimpaired; 

That party has no leadership, no head, except such as is presented 
by a few who have volunteered, without capital and without funds, 
and nothing but zeal and interest of the members to depend upon. 
On the other hand, there is a strong party in this country, not numer- 
ically, but strong in brains, strong in capital, strong in enterprise, 
who think that the view we entertain of it is all rot and bosh. 
They hold a belief, and I do not que.^tion their sincerity. They are 
entitled to be regarded as being as sincere as I and my friends are. 
They hold that the proper use of Niagara Falls is to furnish mechan- 
ical power, and they urge that the building up of cities and industrial 
enterprises and homes of workmen is far more important than any 
sentiment connected with the Falls. 

Secretary Taft. That is not the spirit of the act, is it ? 

Mr. Stevens. That is not the spirit of the act. We all concede 
that; but this act runs for only three years. Then it is wiped off 
from the book, and then Ave stand right where we did a year ago, 
without anything, so far as I know of, upon the part of the United 
States Government, and nothing to resist the tremendous push, noth- 
ing to resist the tremendous impetus of these gentlemen of enormous 
capital, which will help to carry out their views and help them to take 
Niagara Falls. You know perfectly well, I know, and everybody in 
this room knows, and it is a proposition upon which these gentlemen 
confidently count, and they count correctly, that the mere unorgan- 
ized opposition of sentiment and feeling on the part of the people 
who do not know the exact facts, could not count in the long run 
against their tremendous ability, power, and money — and I do not 
allude to that in disrespectful terms — but for that reason 

Secretary Taft. I should not agree with you there. My own im- 
pression is that the popular will finds methods of expression. 

Mr. Stevens. The popular will finds methods of expression, of 
course. The popular will has found methods of expression in this 
case, based upon knowledge of one fact, that the Falls are in danger, 
and they want the Falls preserved. That is what this enormous expres- 
sion of opinion means, sir, and in my judgment it is entitled to the 
fullest resjDect in that regard. 

Secretary Taft. It is entitled to respect so far as it embodies the 
expression of the act itself, but the influencing of quasi-judicial offi- 

18447—06 3. 



o4 TRANSMISSTON OF POWEE FROM THE NIAGARA RIVER, 

cers by popular expression in a question that has to be solved with 
respect to the lights of parties — quasi, if not vested rights of parties — 
is not ordinarily regarded as the best means of reaching a safe con- 
clusion. 

Mr. Stevens. I do not regard it as any means of reaching a safe 
conclusion. I do not regard any opinion of these people as of any 
more weight or importance than the act itself. The American Con- 
gress has enacted a law the principal purpose of which is the preser- 
vation of the P^dls, and the American people, so far as they are rep- 
resented in these " tons," I believe you call them, of documents, are giv- 
ing an expression of opinion. I do not believe that in their expres- 
sion they have intended to hamper your discretion in the slightest 
degree, but they did want to call your attention to the fact that that 
discretion, when the evidence on both sides is balanced, should be 
exercised in favor of the preservation of the Prills, and not for the 
preservation of invested capital, if it should hurt the Falls. The 
whole point and force of my argument is that by granting these per- 
mits at this time you are doing that which inevitably hurts the Falls. 

Secretary Taft. That is a question of fact, too. 

Mr. Stevens. A question of fact for you to determine. 

Secretary Taft. Yes, sir; that depends upon evidence, and not 
upon popular expression. 

Mr. Stevens. Popular expression has nothing to do with it, sir. 

Secretary Taft. That is what occurred to me. 

Mr. Stevens. I do not claim that it does. 

Secretary Taft. I have misunderstood you, then. 

Mr. Stevens. No, sir; I do not commit anybody else, but I com- 
mit myself to that proposition. 

Secretary Taft. It is possible that I have sat on the bench so long 
that I regard this as a judicial hearing and not one to be determined 
by a town meeting. It is possible that popular expression ought to 
have more weight in a hearing like this than it would have in a 
judicial hearing toward determining the rights of parties, but it 
grates a little bit. I do not hesitate to say so. It grates a little bit 
to have the public, popular expression directed at a man who is called 
upon to exercise a certain semijudicial responsibility; but I under- 
stand what you mean by it, and all you mean is that I am to assume 
that the act means what it says, and I will assume that. 

Mr. Stevens. That is it; and I am free to say, sir, that if I had 
the honor of sitting where you sit, and had the same responsibility 
upon my shoulders that is placed upon yours, I would take precisely 
the same view you express. I have seen the letter, or a co])y of it, 
which you referred to here, and the sentiment of that letter meets 
my approval and meets the apjjroval of the committee which I speak 
for here. 

Secretary Taft. I am very glad to hear you say so. 

Mr. Stevens. I have a letter in my pocket from Mr. Appleton, say- 
ing that he thinks the Secretary takes the right view of it in that 
letter. But our position — and by " our " I mean the committee which 
I represent here — is that by granting these permits to any extent 
you are foreclosing a proper solution of the question in the future, 
as Judge Potter has presented it to you. 

Secretary Taft. And that is a ver}^ serious consideration. 



TKANSMISSION OF POWER FROM THE NIAGARA RIVER. 35 

Mr. Stevens. I have attempted to impress upon your mind what T 
believe to be perfectly true, that the moment you grant these permits 
you have granted them for all time, and that they will never be 
removed by any act of Congress, or by any treaty between this 
country and Great Britain, and for the reason that it does that, for 
the reason that it gives these gentlemen an added foothold in their 
effort to capture the wdiole of the Niagara Falls, any decision at this 
time granting the right is entirely immature. They are not suffering 
more than the loss of a little interest on the money, and the action 
which they ask to be taken at this time may, and in my judgment will, 
prejudice to a \'ery large extent any future action in the matter, be- 
cause it grants a right to. these peoj^le; it is a recognition that their 
rights are paramount to everything else. 

There is much more that I might say, sir, but I am aware that 
there are many other gentlemen who wish to address you, and I will 
conclude my remarks here. 

Mr. McFarland. 1 now wish to introduce Mr. F. B. De Berard, 
of the JNIerchants' Association of New York. 

STATE3iE:NT OF F. B. DE liEHARI), OF THE MERCHANTS^ ASSOCTATIOX OF 

NEW AORK. 

Mr. De Berard. Mr. Secretary, the Merchants' Association recog- 
nizes that the (juestion at issue to-day is essentially one of the con- 
struction of the law, the responsibility and the obligations of the Sec- 
retary' of War to act, rather than a review of popular sentiment or a 
statement of the feelings of the people, and it accordingly requested 
former Attorney-General Griggs to present the legal aspect of the 
case for the purpose of aiding the Secretary to obtain a solution that 
should not only fully effect the purpose of the law, but which should 
do essential justice to the various interests, vested and otherwise, 
which are reasonablv seeking protection. Unfortunately, General 
Griggs had an imperative court engagement which rendered it im- 
possible for him to appear here to-day, and he requested me to state 
on his behalf that he would either confer personally with the Secre- 
tary of War, or would submit a brief. 

Secretary Taft. Mr. Griggs was in my office Saturday, I think, and 
told me that he could not be here, but that he would submit a brief. 

Mr. De Berard. Under those circumstances I will not occupy your 
time, except very briefly. I had intended to point out to you the ron- 
siderations which Judge Potter and the gentlemen who followed him 
have stated so clearly, but I will merely amplif}' very slightly upon 
certain points which it seems to me might well be considered. 

The first point I wish to make is that the act of June -29, 1006, 
is merely a temporary act. It does not purport to make a final dis- 
posal of the case. It is merely a preliminary to final adjudication, if 
I may so call it, by an international tribunal, by diplomacy expressed 
through a treaty. It is not necessary for me to enlarge upon the fact 
that whatever property rights may be taken as the sequence to a 
treaty or to any act of governmental authority must be properly and 
duly compensated for. The claim is advanced by the ])ower com- 
panies who are now seeking permits that these permits are necessary 
as a protection to their vested rights. 



36 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

It does not seem to me that that contention can be sustained. The 
present act, or the refusal of the Secretary of War to act under the 
legal authority vested in him, will not ultimately deprive these com- 
panies of any of the rights which they may be entitled to, nor defi- 
nitely or definitively destroy the value of their investments. There 
undoubtedly have been made large investments. Undoubtedly those 
investments should be considered, but they should not be considered 
in such a way as to deprive the act under consideration of all force 
nor to render impossible the final consummation of the purpose, of 
the act. As Judge Potter has pointed out, the effect of the granting 
of these permits will be not only to immediately protect the capital 
of the companies — the investments in question — but will be to create 
great dependent industries throughout a very large part of the State 
of New York; and it is absurd to suppose that in the final considera- 
tion of this question it can be disposed of without compensation for 
the very widespread harm to be inflicted upon a large part of the com- 
munity by the final revocation of the permits and destruction of 
industries which have grown up under those permits. 

Now, Mr. Secretary, assuming that the capital that is invested in 
good faith must be protected, the issuance of the permits by you is 
not essential to that protection. On the other hand, the issuance of 
those permits will tend to make their revocation impossible ; and fur- 
thermore, the issuance of those permits will tend, in my opinion, very 
powerfully to destroy the possibility of a settlement of this question 
by international treaty, for the reason that the development on the 
Canadian side is not essential to Canadian development. It is 
developed primarily with capital from the United States for the 
purpose of promoting industries in the United States. Canada can 
use but a small proportion of the power, and with what face can the 
United States go to Great Britain and ask for the consummation of a 
treaty for the protection of Niagara Falls, if you, Mr. Secretary, 
promote that diversion by granting these permits under which great 
American industries will be developed for the benefit of the United 
States? With- what face can the United States ask Canada to sur- 
render its rights when the United States, notwithstanding the 
expressed will of Congress shall have proceeded in the interval to 
enlarge the development against which we pretend to be protesting? 

Mr. McFarland. Mr. Henry E. Gregory is here representing the 
American Scenic and Historic Preservation Society, and will next 
address you. 

STATEMENT OF HENRY E. GREGORY, REPRESENTING THE AMERICAN 
SCENIC AND HISTORIC PRESERVATION SOCIETY. 

Mr. Gregory. Mr. Secretary, after the powerful arguments of the 
previous speakers there is little for me to say, except that I acquiesce 
in and indorse their statements. The State of New York has done 
more than any other agency for the preservation and protection of 
the Falls of Niagara. In 1885 it established the State reservation at 
Niagara, and placed it under the management of a board of com- 
missioners, which has ever since been engaged in antagonizing — not 
ever since, but during ten or fifteen years at least it has been engaged 
in antagonizing — the corporations that went up to Albany by their 
representatives, from time to time, to obtain charters and rights to 



TRANSMISSION OP POWER FROM THE NIAGARA RIVER. 37 

the use of the waters of the Niagara River. The man who did more 
than anyone else for Niagara in New York, especially in connection 
with the reservation, was Andrew H. Green, Avho Avas also the founder 
of the American Scenic and Historic Preservation Society, which I 
represent here to-day on short notice, the officers being obliged to be 
absent. 

All that has been said by the previous speakers, as a rule, meets 
with nw approval, and this organization will indorse their state- 
ments. The organization which I represent is a corporation under 
the laws of the State of New York, but it has a national scope. It,s 
aim is to resist not only corporate attacks upon all great scenic objects 
in this country, but individual assaults. It has aimed to protect the 
Adirondack forests from the devastation of the pulp-mill companies, 
private enterprises, and railroad companies. It has sought to pro- 
tect Watkins Glen, and certain historic and interesting spots along 
the Hudson River. It is recognized throughout the State as an or- 
ganization that does much good in that line. It has taken up the 
work of the reservation conmiissioners, indorsing it and sup])orting 
it, and it comes here to-day and enters its protest against any further 
diversion of the waters of Niagara in the interest of private enter- 
prises, hoAvever meritorious; and it especially antagonizes and pro- 
tests at this time against the introduction of power generated on the 
Canadian side. The reasons have been already stated. 

I am only one of that unorganized and leaderless majority that 
stands such a small chance of accomplishing anything against organ- 
ized capital, intrenched behind its powerful bastions, and only one 
of that great number of Americans who insist that there is something 
in sentiment ; that if it had not been for sentiment we Avould not be^ 
any of us, where we are to-day. Why, sir, if such a country as Greece 
had such a natural object as Niagara Falls, the history of the world 
would have been affected by it. A well-known writer in England 
has said that if such a natural object had existed in the ScA^ern or 
the Thames, the emotion of the sublime Avould perhaps haA'e been 
earlier dcA'eloped, and the course of English literature AA^ould liaA^e 
been changed, to some extent at any rate. Here in this country, 
where capitalism is so prevalent, and mammonism is so dominant, 
the time is opportune for the Secretary of War, in the exercise of the 
discretion given to him by Congress, representing the gi'eat Republic, 
to notify the corporations that further diA'ersions of the Niagara 
River must cease. Noav is the time, as the previous speakers have 
said. 

The act of June 29, 1906, is provisional and temporary. There are 
only tAvo ends in view — for Niagara Falls. Either, by the gradual 
AvithdraAval of AAater, they Avill CA^entually become so diminished and 
reduced as practically to be destroyed, or they will noAA% by your 
action, and the further action, perhaps, of Congress and the Secre- 
tary of State, be placed in such a ]50sition that their ultimate pro- 
tection Avill be assured. The only salvation — the only clear and com- 
l^lete sah'ation of the Falls is through international protection ; and 
this act of Congress had that in A^icAv, for in the fourth section it 
requests the President of the United States to open negotiations 
through the Department of State Avith the British foreign office 
looking to the CA^entual preservation of the Falls and riA'er of Niagara 
by international agreement. This is tlie great end in vicAv, and your 



88 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

action will further that end, if you insist now upon refusing to grant 
permits for the introduction of power from Canada. The reasons 
have already been stated much better than I can state them. The 
arguments are clear and unanswerable, it seems to me. 

Consider that the Niagara River, is an international boundary. 
Consider the complications that may ensue in the unforeseen eventu- 
alities of the future, when we might be involved in some controversy 
with Great Britain, requiring diplomatic treatment. Then consider, 
if these rights shall have been granted to Canadian companies, what 
our position would be. No, sir; the only position to take, in order to 
avoid possible international complications and diplomatic embarrass- 
ments that might eventually lead to hostilities between the two coun- 
tries, is to prevent them now — to refuse to grant these licenses now. 
Let the negotiations begun by the Secretary of State go on ; let the 
people of Great Britain see that on this side of the water, at any rate, 
there is a strong national sentiment in favor of the preservation of 
the Falls, and there will be eventually no difficulty in the securing of 
a treaty preserving the Falls for all mankind and forever and forever. 
That is the main purpose of this bill. It is not antagonizing invested 
capital. I recognize the high position of these gentlemen who come 
here. I know Mr. Stetson is one of the most prominent citizens of 
New York, prominent in aifairs, prominent in the church, and I will 
Sly nothing against any one of these gentlemen, personally or other- 
wise; but I will stand on popular rights. The people have a prior 
right here. The Falls belonged to the people before the corporations 
were ever heard of. 

The people are the primal owners, and the}^ come here with a much 
stronger right and stronger claim to consideration than do the corpo- 
]-ations. The corporations are the intruders, if anybody. They are 
the trespassers. New York having been unable to protect the Falls, 
as we have seen, the United States has placed them under the broad 
aegis of its protection, and now we shall see whether the United 
States is not strong enough to protect the^ Falls effectually and for 
all time. The matter is too important to be dismissed in a few 
words. I am very glad the other speakers have so carefully and so 
skillfully considered the ditl'erent aspects of the case. I submitted a 
brief myself, last April or May, to the Conmiittee on Rivers and 
Harbors, in which I considered the whole legal status of the matter. 

Secretary Taft. Will you file a copy of that ? 

Mr. Grfooky. Yes; I stated in that brief that the President has 
unlimited power in the negotiation of treaties; and backed by public 
sentiment, as he would be in insisting on some such treaty as this, 
there can be no possible doubt that it would eventually become the 
supreme law of the land. 

Mr. McFarland. We have yet one speaker. Dr. John M. Clarke, 
State geologist of New York, who has, perhaps, studied the Falls 
more intimately than any other man here, and he will now address 
you. 

STATEMENT OF DR. JOHN M. CLARKE, STATE GEOLOGIST, OF NEW YORK. 

Doctor Clarke. Mr. Secretary, it has been in the line of my oppor- 
tunity and my duty, officially, for the last twenty years to familiarize 
myself with the industrial development as well as the physical and 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 39 

g'eological conditions at Niagara. I may say that I have grown up 
along with the power companies, although to-day I do not know a 
single individual connected with any of the companies, and there- 
fore whatever I may say will be entirely free from personal bias. 

I have endeavored, sir, to figure out as best I could, Avith expert 
assistance of very competent hydraulic engineers, the situation at 
Niagara — the amount of flow, the present diversion, and the probable 
results therefrom. It has been some seven years since, I think, that 
I first sounded a word of alarm in regard to what seemed to me a 
further devastation of Niagara, and I have hammered away at it, as 
opportunity permitted, ever since. I have had expert assistance. I 
am not gi^'en to or likely to be carried away by matters of sentiment. 
It is not exactly in my line. I am dealing with hard facts. We are 
endeavoring in Ncav York, in the department which I have the honor 
to direct, to develop the economic resources of the State, and I have 
endeavored to bring together the facts Avhich I think are in practical 
accord with the results that have been presented publicly by the 
International Waterways Commission, and which I should like to 
file without reading them at length to-day. They are. in a general 
way, to this effect : That when diversion from Niagara, from all 
causes, has reached a maximum of 40,000 cubic feet per second there 
is probably no escaping the fact, from wdiatever way we may look 
upon it, that the water will be w^ell down upon the rock bottom of 
the American Falls between Prospect Park and (joat Island. I 
think the facts that I can supply now in detail will fully verify that 
conclusion. And into such a conclusion as that no sentiment can 
enter. It is a question of whether Ave have the facts accurately. 

Secretary Taft. Is there not a natural ojDeration going on. Pro- 
fessor, Avhich reduces the AA^ater on the x\merican side? 

Doctor Clarke. I Avould not say that there AA^as, Mr. Secretary. 
There is at the park, or rather there has been since the poAver com- 
i:)anies began their Avork, since the Niagara Falls PoAver Company 
established its intake, an easy formation of ice dams, Avhich shows 
in how delicate equilibrium the American Falls are — an ice dam 
Avhich Avill turn oft' in the Avinter the entire flow of Avater from the 
American side, and leave it so bare that one can Avalk dry shod from 
the American shore to Goat Island. That has happened frequently 
in the last fcAv years, Avhere tAAcnty years ago it AA-as an occurrence of 
the greatest rarity. You understand, sir, that the American Falls 
51 re the delicately adjusted falls, and they represent not more, per- 
haps, than one-fifth of the entire volume of the riATr. 

They are the falls that are beginning to shoAv the danger first. 
The bottom of the river, the rock sill of the river slopes from the 
east toAAard the west. It slopes from the American side doAvn to- 
AA'ard the Canadian side 18 feet ; and therefore any fall, or any large 
diA^ersion of Avater, may be practically imperceptible on the Cana- 
dian side, Avhile A'ery perceptible on the American side. 

Secretary Taft. Do you knoAA^ Avhere the AA-ater is taken on the 
Canadian side? 

Doctor Clarke. The three Canadian companies take Avater from 
different points on the Canadian side. It is my impression that none 
of the water-5-I do not know Avhether I shall agree Avith the Water- 
ways Commission in regard to this conclusion or not — but it is my 
impression that none of the Avater diverted on the Canadian side 



40 TRANSMISSION OF POWER FROM THE NIAGARA RIVER, 

would materially affect the flow on the American side. I think it is 
practically all taken below what may be called the parting of the 
waters. There is a fall of approximately 56 feet from the summit of 
the waters down to the crest of the Falls. 

Secretaiy Taft. In other words, the only effect of the Canadian 
withdrawal of water would be upon the Horseshoe Falls? 

Doctor Clarke. I think that is approximately an accurate state- 
ment. So far as my evidence goes, I do not see in what way it would 
affect the American Falls, unless by some obstruction, by the occur- 
rence of these frequent ice dams, or some cause of that kind. That 
is a pretty complicated question, sir. I should not wish to go on 
record as replying positively one way or the other; but we must bear 
in mind all the time that those Canadian Falls are ours, or half ours. 

Secretary Taft. I understand; but of course the effect upon the 
Falls of the withdrawal from the Canadian side would be much less, 
proportionately, if it did not affect the American Falls at all, in gen- 
eral appearance and scenic beauty, than if it affected the A^ hole river, 
would it not ? 

Doctor Clarke. I am not prepared to say that the Canadian clivei'- 
sion affects the American Falls, but I am prepared to say that the 
American diversion does and will seriously, when those companies are 
producing to their full extent, affect the American Falls. I could 
embody all this in a brief, if I might be permitted to submit it to you. 

Secretary Taft. I would be glad to see it. You say that one-fifth 
of the river goes over the American Falls ? 

Doctor Clarke. Approximately ; yes, sir. 

Secretary Taft, That would make four-fifths over the Horseshoe 
Falls? 

Doctor Clarke, Yes, sir. 

Secretary Taft, Four-fifths would be how many cubic feet per 
second ? 

Doctor Clarke. Assuming it as 224,000 cubic feet, that would be 
160,000 cubic feet per second — approximately that, 

Secretarv Taft, 160,000 cubic feet per second? 

Doctor Clarke, 165,000 or 175.000. 

Secretary Taft. And 13,000 cubic feet would be some 6 or 8, or 
perhaps 8^ per cent, would it, if that were withdrawn from the Cana- 
dian side? 

Doctor Clarke. 13.000? 

Secretary Taft. Yes. 

Doctor Clarke. I do not grasp your point, exactly, Mr. Secretary. 

Secretary Taft. My point is this: I assume, for the purpose of 
the statement, that generally you were correct in saying that the jjro- 
posed withdrawals on the Canadian side would affect only that side, 
because it is below the source of supply for the American side and 
above the mouth of the Horseshoe Falls? 

Doctor Clarke. Yes. 

Secretary Taft. The Horseshoe Falls discharge say 175.000 cubic 
feet a second. If the amount to be taken were 13,000 cubic feet a 
second, it would mean a reduction in the volume going over the Falls— 
the Horseshoe Falls — and as the American Falls would not be affected 
at all, that might be left out of consideration. It would mean a re- 
duction in the volu.me of somewhere between 6 and 9 per cent, would 
it not? 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 41 

Doctor Clarke. Yes; I presume it would. 

Secretary Taft. Have you any idea how much that would affect 
the appearance of the river? 

Doctor Clarke. Well, sir, 3'ou have already granted a diversion on 
the American side of 13,433 cubic feet per second on the American 
side alone ? 

Secretary Taft. Yes. 

Doctor Clarke. That, of itself, is a very important item in the sub- 
traction of water from the American cataract, because the water has 
to come from the American side alone. 

Secretary Taft. That is now being withdraAvn? 

Doctor Clarke. Yes. 

Secretary Taft. I was addressing myself to the Canadian side noAv. 

Doctor Clarke. Yes, sir; I do not laiow that I could answer that 
question out of hand, from any notes I have in my hand at the 
moment, as to just what difference that would make. I should want 
to sit down and figure it out. 

Secretary Taft. I should like very much to hear from you on that 
later. 

Doctor Clarke. The point I wish to make is this, and I have en- 
deavored to be careful in this matter. In my judgment, all the diver- 
sion that is provided for in this law to be made from the Niagara 
Kiver, either diversion from the American side or transmission from 
the Canadian side involving diversion^ — that is, up to the 160,000 
horsepower line — could be carried out without bringing the waters 
of the American side down below the safety line, without bringing 
them down any farther than the edge of the rock bottom; so much 
water could be taken out and the Niagara Falls would be still flowing 
on, and all the bottom of the river would be covered. Of that I feel 
comparatively sure, but that amount of water would be gone. That 
is not the Niagara in its original beauty. "Wliat remains is not all of 
the falls of the Niagara. 

And. furthermore, 1 desire to make this point. I have not very 
much enthusiasm, naturally, over nature that is complicated with 
even these powerful developments of mechanical ingenuity. I ad- 
mire them. I wonder at the brain that can work them out. I have 
followed them quite closely, but I, personally — and I am speaking 
only personally, as a lover of nature and as a geologist who has always 
regarded the Niagara as one of the world's greatest phenomena — I 
would prefer to see all the power companies erased from Niagara. 
I believe it is quite within the powers of the Government to do that. 
Indeed, I believe there is precedent for so doing. 

Secretary Taft. If they were not there we would not have these 
troublesome questions; that is certain. 

Doctor Clarke. Then there is this point, which I submit for your 
consideration. Within a radius of 100 miles of Niagara there is 
ample undcA'elo])ed ]iower to manufacture all the carbide, carborun- 
dum, and breakfast food, and so on, that the world requires. Within 
a radius of 100 ]niles we have a large amount of undeveloped hydrau- 
lic power. It is not necessary to despoil Niagara. It is not necessary 
to transmit power from Canada into America. It is not necessary 
even to continu^ the poAver companies noAV in existence on the Ameri- 
can side. 



42 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

If it is entirely proper, I would like to make a remark in regard to 
the standing before the public of the companies — some of them, 
IDcrhaps, applicants for power. 

Secretary Taft. I Avonld be glad to hear anything about that. 

Doctor Clarke. I have had something of j^ersonal familiarity and 
acquaintance with several of these companies, it having been my lot 
to live at Albany for some years, and to have seen them come and go, 
and come again and go, sometimes with the spoils of victors and 
sometimes leaving their spoils behind them. There is a dilt'erence in 
the public morale, if I may so express myself, of some of the com- 
panies. It has been remarked, in previous hearings, that one of the 
companies has contributed very largely to the beautification of 
Niagara Falls. It has kept faith Avith the letter and spirit of its 
charter. I believe that is, on the Avhole, correct. I believe the 
Niagara Falls Power Company has kept its faith with the people, 
that it has carried out the spirit and the letter of its charter and it has 
gone beyond that. It was my fortune years ago, as a boy, to grow 
up alongside of the organizer of the Niagara Falls Power Company — 
W. B. Rankin. He was the only man connected with any of the 
jDower companies that I have hacl the honor to know, but that does 
not in any way influence my judgment, except that I have known of 
the actions and conduct of the company. I believe I can sjjeak in 
only the highest praise, so far as my knowledge of their public con- 
duct is concerned; but I do not think the Niagara Falls Power Com- 
pany, sir, will ever be without sin as long as it continues to waste two- 
thirds of the water it diverts for power purposes — nor will any other 
company. 

Secretary Taft. Is that because its tunnel is not low enough? 

Doctor Clarke. Yes, sir; because two-thirds of the fall is wasted. 

The Niagara Falls Hydraulic Power and Manufacturing Company 
has a power plant and tailraces there — an eyesore and oft'ense to the 
public. I have no doubt the company has lived up to the letter, and 
perhaps the spirit also, of its charter. 

Secretary Taft. It has not completed its plant, so that it is a little 
hard to tell, is it not, whether it is going to be an eyesore or not? 

Doctor Clarke. Yes, I presume that is entirely correct. I shoidd 
have made such a reservation. It has been an eyesore for many years 
past and it is a thing Avhich has attracted more attention than any- 
thing else except the advertising signs which were put up on the 
Canadian side for the benefit of the American tourists, and which 
have now, I believe, been taken down. 

There is another company, the Niagara Falls, Ontario and Lockport 
Power Company. I take the liberty of making a statement which is a 
matter of common knowledge. I think we are dealing entirely with 
facts in this case. The Niagara Falls, Ontario and Lockport Power 
Company was chartered in 189-1:, the charter being signed on the 31st 
of May of that year. The charter required that it should begin work 
in good faith within ten j^ears, and the company came to the legisla- 
ture of 190-1: with its charter expiring by limitation. It was chartered 
as a power developing and manufacturing company. It came to the 
legislature, as I say, with its charter expiring by limitation, and no 
work done. It asked a new charter with very greatly extended powers. 
This charter passed both houses of the legislature, and it went to the 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 43 

governor. It is a well known fact, and I state it as a matter of evi- 
dence, that this company made an offer to the governor of the State of 
New York, through one of its representatives, of a quarter of a million 
dollars to the State treasury if he would sign that charter. He forth- 
with vetoed it. 

I call your attention to the fact that that veto was signed on the 
15th day of May, 1904. There were six days left in which the old 
charter was good, in which the company could go to work in good 
faith. I am informed that it did undertake to do so. I know it 
came back the next year, and I also knoAv that proceedings in the 
legislature of that year, although this bill was progressed, were some- 
what malodorous, and the . present governor of the State stepped 
forward and stopped the progress of the bill. I do not know under 
what legal authority this company is doing business. I simply make 
these remarks for your consideration. 

Secretary Taft. You mean that its right has expired? 

Doctor Clarke. I woidd not venture to say. It had under the old 
charter, as I understand the matter, six days in which to do work in 
good faith. No new charter was granted to it. It has a referee's 
decision in its favor, I believe, and it is under the supervision of the 
New York State Gas and Electricity Commission, but at the same 
time it is entirely proper to inquire into the standing of this com- 
pany, and the authority under which it is doing business, before 
granting any rights to transmission. 

Secretary Taft, Is that the one that has built a line to Syracuse ? 

Doctor Clarke. I am inclined to think it is, sir. 

A Voice. Yes, sir; that is the one. 

Secretary Taft. And it is the American side of the company that 
you refer to now ? 

Doctor Clarke. Well, I am referring to the old organization. I do 
not know just what the standing of the organization is. 

Secretary Taft. As I understand, there are two companies — the 
company that makes electricity on one side, and then there is a com- 
pany that transmits it to the United States on the other. I do not 
know how much they have invested — perhaps one million or more — 
in transmitting plants. It is that American company? 

Doctor Clarke. It is the old American company to which I had 
reference. What its relations to the Canadian organization are, ex- 
plicitly, I can not say, as those relations have become somewhat com- 
plicated. 

Secretary Taft. I Avould be glad if you should file what you in- 
tended to file, and also a statement with reference to or in answer to 
questions that I suggested as to the percentage of loss to the volume 
of water coming over the Horseslioe Falls, if 18,000 cubic feet were 
Avithdrawn from the places where it is noAV proposed to withdraw 
them on the Canadian side. 

Mr. McFarland. With your permission, Mr. Clinton Rogers Wood- 
ruff, our first vice-president and acting secretary, will now close for 
our side. 

Secretary Taft. You pi-efer to close now ? 

Mr. Woodruff. I am inider the necessity of leaving at 4 o'clock. 

Secretary Taft. I do not know how long the gentlemen will take 
who represent the various companies. 



44 TRANSMISSION" OF POWER FROM THE NIAGARA RIVER. 

Mr. Woodruff. I should prefer to speak after having heard them; 
but if the arguments on the other side extend beyond 3.30 o'clock it 
would be impossible for me to be here. 

Secretary Taft. I rather think the arguments a\ ill go on, probably, 
to-morrow. 

Mr. Woodruff. Then, with your permission, there are two or three 
things I should like to say now. 

Secretary Taft. But I do not think you ought to give up your 
closing. 

Mr. Woodruff. I will leave that to Mr. McFarland, then, as in 
many respects he is the best-informed man on the subject. 

STATEMENT OF CLINTON ROGERS WOODRUFF, FIRST VICE-PRESIDENT AND 
ACTING SECRETARY AMERICAN CIVIC ASSOCIATION. 

Mr. Woodruff. There are one or two phases of the subject that I 
should like to address myself to, and one is as to the weight to be 
given to the letters which have been filed in your office by various 
people throughout the country interested in this subject. I asked 
General Mackenzie, and he was kind enough to get me one or two 
packages of them. I suppose they were selected quite at haphazard, 
without knowing what they contained. 

General Mackenzie. Yes. 

Mr. Woodruff. In running over them I find that a large number 
express a direct opinion as to the method to be pursued in preventing 
the further desecration or depletion of Niagara River. In other 
words, they were directed to the point that is before you. It has 
been said by one or two speakers, and I want to have it borne in on 
your mind, that the burden of preserving the Niagara has been trans- 
ferred from the shoulders of Congress to your own shoulders, and 
that the act of June 29, 1906, is designed for the preservation of 
Niagara. The method is for you to determine. I take it for granted 
that there is no division of opinion as to the necessity of preserving 
the Falls. That is what the act was intended for. 

These letters go to express the opinion that the Falls can only be 
preserved by preventing any further admission of power from the 
Canadian side, or from the Canadian companies, either in immediate 
operation, or likely to go into operation in the near future. 

Secretary Taft. They are founded, are they not, a good deal on 
circular letters that Mr. McFarland has sent out? 

Mr. Woodruff. Most, I presume, are. Some seem to l^e mere 
expressions of opinion, having seen that the matter was up before you 
for consideration. 

Secretary Taft. Do you not think it would be fair for me to weigh 
those expressions in the light of the statements in Mr. McFarland's 
letters? 

Mr. Woodruff. I should say it was fair to read the expressions in 
the light of the persons who wrote them. When a man so careful 
in his utterances as Governor Pennypacker, of Pennsylvania, who, 
like yourself, has served for many years with great distinction on the 
bench, and, when he assumed the care of governor of Pennsylvania, 
did so with the reputation of having been our best nisi prius 
judge 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 45 

Secretary Taft. I want to ask you, in fairness, if you did not know 
ajiything about it, if you had not looked into the law and the evidence, 
and were told that the taking of water from Niagara proposed here 
under these applications would be like taking all that goes out of the 
Hudson, the Susquehanna, the Delaware, and the Potomac rivers, you 
would thhik there was anything left of the Niagara? 

Mr. Woodruff. I should say the point was this 

Secretary Taft. No; just a moment. AVould you not think that 
destroyed Niagara utterly ? 

Mr. Woodruff. I should say if the person who made that statement 
was a man who occupied a prominent position, whose opinion was 
entitled to weight, it would have very nearly that effect. 

Secretar}^ Taft. And if, instead of that, it turns out that it affects 
the flow over the Horseshoe Falls about 6, 8, or 10 per cent, do you 
think that is a fair method of soliciting popular opinion? 

Mr. Woodruff. No ; it would not be, if that were the method ; but 
I am not sure that it was. I think your hypothesis, if you will per- 
mit me to say it, with all due respect, is hardly a fair one. You have 
a board of expert advisors, consisting of a commission, of which 
Colonel Ernst is chairman, and others, and they are in doubt as to 
the effect that a greater diversion will have. There is no unanimity 
of opinion on the other side, so far as I am advised. The question 
before you is how far you can go with safety and not destroy the 
Falls as they now are; and therefore the expression of opinion that 
the only thing to do is, as Judge Potter has said, to preserve the statu 
quo is pertinent. There are a great many appeals there, which under 
any proper consideration should be excluded, of course; but when 
men like Henry C. Lea, and others whose names I mention here — and 
if you will look over them you will see the names of men whose views 
are entitled to weight 

Secretary Taft. I quite understand that there are gentlemen who 
are interested, and properly interested, in preserving the scenic 
grandeur of Niagara Falls, who do not believe that a drop of water 
ought to be taken out for mechanical purposes; that it ought all to 
be preserved because of its proper effect upon the people, and upon 
the poetry and loyalty, and the patriotism of the whole United 
States. But I am asking you with reference to what weight I ought 
to give to people who do not take that position, exactly, but who 
were naturally aroused when they were told that there was to be 
taken out of the Niagara River, which is not an enormous river in a 
sense, all that there is in the Potomac, in the Hudson, in the Susque- 
hanna, and in the Delaware. AMien I saw that statement I did not 
wonder that I got these protests. I must say that I do not think it 
presents fairly the question I have to decide, and that it arouses pub- 
lic opinion on a basis that the facts in the case and the evidence in the 
case here presented do not really bear out. 

Mr. Woodruff. I should like to answer that, if I may, by present- 
ing to you a little different point of view from that which you 
expressed in answer to one of the speakers in regard to j^our own 
position, as to whether you sat here as a quasi judicial officer, or 
whether, in a way, it is taking a town meeting to determine the jjublic 
sentiment that exists upon this subject. This act is not a mandatory 
act. There is no obligation resting upon you to grant one single per- 
mit for one single horsepower to come into this country. You maj'^ do 



46 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

it, if in your jiidgment and in your discretion you are of the opinion 
that the Falls are not going to be jeopardized. This is an act for the 
preservation of Niagara Falls. That is one thing that is clear. 
That is one thing that is unequivocall}^ expressed. There is some 
doubt as to the methods, and the methods are matters within your 
sound discretion. 

Secretar}^ Taft. Do you not think that it is a question of fact, 
whether it be discretionary or determined by absolute right, as to 
hoAv much water is to be taken out under this proposition? 

Mr. Woodruff. That is true. 

Secretary Taft. Do you not think that circulars which indicate 
that all of the Avater in the Niagara is to be taken out would mislead 
public opinion? 

Mr. Woodruff. But you are assuming that all of the expressions 
of opinion are based upon that statement. I have no knowledge that 
that is so. 

Secretary Taft. I only know the statements that are made in the 
circulars that were sent out. 

Mr. Woodruff. I have not seen that statement myself, and I can 
not speak with knowledge; but I do not think it is fair to assrmie 
that all of these statements are based upon that. The hurried read- 
ing that I was able to give to the opinions seemed to indicate a variety 
of sources of information. The public seems to have liad a great deal 
of interest in it. When careful men say that they are of opinion 
that there should be no further diversion, I think that ought to be 
taken into consideration, and while it is ^imposing a great obligation 
and burden on you, if you are going to eliminate 

Secretary Taft. I have got to have that. I am not complaining 
about that. I have to meet it. 

Mr. Woodruff. That is quite true. If you are going to take these 
into consideration, as I am sure you are, they ought to be classified; 
those which merely ask you to use your influence should be properly 
disregarded, but when there is an expression of opinion, I think it is 
entitled to be given some weight, just as in trying a case in which a 
man's character is at stake and in which a long line of testimon}^ is 
heard as to whether the man had previously borne a good character. 

One man will testify in a flippant manner, and another will make 
a careful statement. You judge of the weight by the manner in 
which the statement and testimony are given. I think some one 
should give careful consideration to these expressions of opinion. So 
far as I have read them, I have not noted the expression in regard to 
the various rivers which you mentioned. Those that I have come 
across run all the way from the very simple statement that the writer 
was of the opinion that no further diversion should be made, to the 
ver}^ excellent letter from Edward D. Welch, who, while he recog- 
nized the work that had been done there, said that he felt that when 
it came to a question between the preservation of Niagara Falls and 
the vested interests of capital he was in favor of preserving the Falls. 
[Producing a paper.] Is this the circular letter to which you refer? 

Secretary Taft. There are three of them here. Here they are. 
Mr. McFarland in his letter of November 5 calls it "A rapidly run- 
ning river nearly a half mile wide and 18 feet deep '" — 28,000 cubic 
feet. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 47 

Mr. Woodruff. If the extreme that is asked for by the applicants 
here were granted — that is a matter of mathematical computation. I 
have not made it, but I assume that Mr. McFarland, who is careful 
about these matters, has. 

Secretary Taft. ''As a matter of fact, runnino- at a velocity of 6 
feet per second, it would fill a channel half a mile wide, about 21 
inches deeji '' — instead of 18 feet deep. "A river half a mile wide 
and 18 feet deep, flowing at a velocity of 6 feet, would discharge 
285,120 cubic feet per second, or ten times the amount under con- 
sideration." 

Mr. Woodruff. I presume you are reading from some official 
re])ort ? 

Secretary Taft. I read from a report that I made when this cir- 
cular came in. 

Mr. Woodruff. All this goes to illustrate that there is a very grave 
difference of opinion between the people who are deeply interested. 
I take it for granted that all your advisers, as well as yourself, are 
interested in preserving Niagara Falls. 

Secretary Taft. You may take that for granted. 

Mr. Woodruff. If you examine the testimony or hearings before 
the River and Harbor Committee on these variou'-; qiiestions you will 
find that they all came up before that committee, and the question 
came up, in the preparation of that act, whether they should jMit in 
a minimum or a maximum, or allow any diversion at all. The result 
was the act as it stands, which transfers from them to you the deter- 
mination of this question; but I want to reiterate with all the force 
of Avhich I am capable, that there is not a single word in this act which 
is mandatory. You could to-day write an opinion forbidding the 
importation of any power or of any further poAver from Canada, 
and there is no power under that act which would give the power 
comj^anies the right to mandamus you to permit the introduction of 
their power. 

^ye come back, then, to this question 

Secretary Taft. Let me go back a little, because I think this is 
important. I do not want to be unfair, but Mr. McFarland asserts 
in these circulars that the amount to be withdrawn is as much as the 
Hudson, Delaware, and Potomac rivers combined discharge at their 
mouths. That was the expression, 

Mr. McFarland. And I am prepared to prove that. 

Secretarv Taft. The mouths of these rivers are estuaries of the sea 
in which the tide ebbs and floAvs. They suggest to the mind enor- 
mous volumes of moving water, as their introduction here was in- 
tended to do. Thev can not fairly be compared with the Niagara 
River at all, but, if compared, the least unfair way is to take their 
volume of discharge during an ebb tide. Exact information upon 
this subject is not at hand, but cross sections of the estuaries have 
been constructed and measured, and from these it is estimated that 
the discharge during an ebb tide is, of the Hudson River at least 
050,000 cubic feet ; of the Delaware River at least 1,500,000 cubic feet, 
and of the Potomac River at least 2,500.000 cubic feet, or 4,650,000 
cubic feet, or 166 times the volume which Mr. McFarland attributes 
to them. , 

Mr. McFarland. Is that the volume of those rivers? 



48 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft. You said at their mouths. That is the impression 
I got from reading- the circular, and it gave me the impression tliat 
if it were true there wouldn't be any Niagara River left at all. In 
other words, I do not think that public opinion solicited on such a 
statement of fact valuable. Suppose, on the other hand, you meant 
the fresh-water discharges taken up above tide Avater — not at their 
mouths, but above tide water. That would be somewhat nearer, but 
still it would be an exaggeration, because of the Hudson RiA-er the 
maximum is 143,000 and the average 1G,000; the maximum of the 
Delaware is 06,540, and the average is 21,467; and of the Potomac 
the maximum is 198,000, and the average is 15,069 — 407,600, there- 
fore, to 52,536. This only illustrates what I mean when I say that 
expressions of opinion that are not based on an exact knowledge of the 
evidence, in a matter that has to be determined by the evidence, is not . 
of value to one who is attempting to reach a just conclusion. 

Mr. Woodruff. I think, however, this fact should be borne in 
mind — that this is only one of a series of circulars, and it would 
hardly be fair to exclude all on the strength of one. 

Secretary Taft. I agree with you. 

Mr. Woodruff. I must confess that I have read this for the first 
time. I saw the circular but I did not read it before; but I do think 
the question of public opinion, so far as it relates to the question of 
the admission of any power, is to be taken into consideration. 

You spoke a little Avhile ago in a discussion on a point raised by one 
of the previous speakers in regard to the question as to the possible 
comiDensation Avhich might be accorded to the power companies by 
reason of your refusal to grant permits damaging them. 

I should like to call attention to this fact. There is a great deal of 
significance in the fact that this duty of preserving the N iagara Falls 
is imposed on the Secretary of War. It was done advisedlj^, because 
the Niagara River forms part of the international boundary. It 
forms a part of that boundary which in a previous war we know was 
the center of hostilities, and in the event of future wars may again be 
the center of further hostilities. Therefore, you are clothed not only 
with the power Avhich the act of June 29, 1906, gives to j^ou, but with 
the war poAA^er, the great police power of the United States, Avith all 
that that means — not only the poAver to protect the rights and the 
property of the people, but to protect their most sacred possessions; 
and if in the exercise of that enlarged police power you should be 
compelled to expropriate some property, you could do so just as the 
United States did in the ciA^l war. 

A feAv years ago I had the privilege of going to the Indian Terri- 
tory Avith your distinguished colleague. Secretary Bonaparte, to iuA^es- 
tigate certain charges that had been made in the Territory regarding 
the administration of affairs there. Among the matters that AA^ere 
inquired into Avere claims for property taken during the civil Avar. 
They Avere taken at a time Avhen it was impossible to get an act of 
Congress, and were taken upon the basis of the right to confiscate 
and expropriate whatever property was necessary to protect the then 
interests of the United States. So I take it noAv; with the feeling 
that exists in Congress, Avhich Mr. McFarland has described to j^ou 
and Avhich I am willing and ready to corroborate, if you should see 
fit, as I have no doubt j^ou will see fit when you come to consider this 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 49 

in all its bearings, to limit materiall}^, and possibly entirely, the im- 
portation of power. If there is any damage done, if there is any 
interference with vested property which the United States Govern- 
ment can properly compensate for because of its taking, it will be 
done. The good faith of the United States will stand pledged. I 
have no doubt whatever that if this matter were '' put up " to Con- 
gress in direct terms it would be only too glad to supply a sum of 
money to preserve Niagara Falls in all their grandeur. 

So you are dealing with the matter not only under the act of 190G, 
known as the Burton Act, but as the representative of the police or 
war power of the United States, and that clothes you with extra'ordi- 
nar}^ powers, it seems to me, to preserve what we all agree to be one of 
the greatest bits of natural wonder, not only in our own land but 
in the whole world ; and T feel that these expressions of opinion all 
go to show how deep and abiding and hoAv widespread is the interest 
of the people in the preservation of this natural wonder. I sincerely 
hope that, should there be the slightest doubt in your mind as to the 
effect of a further diversion of water from the Niagara Eiver for 
the purpose of creating electrical power, you will exercise the au- 
thority that is clearly granted to you in terms in the Burton Act, 
and refuse to grant any further permits. 

Another point. Why have the companies which are seeking for 
admission of their power gone to Canada instead of creating that 
power on the American side? I think it is generally conceded — I 
speak subject to correction on this point, however — that the compa- 
nies which are seeking this permission are largely financed on the 
American side. 

Secretary Taft. I think that is generally conceded, except possibly 
as to the one that is furnishing power to Toronto. 

Mr. AVooDRurr. That is not a matter of my own knowledge, but I 
take that to be the case. It is perfectly proper for you as Secretary of 
War to ask why these American financed companies should go to the 
other side of the international boundary line to put up their power 
plants. One of the reasons is that our New York Niagara Falls res- 
ervation commissioners have been less complaisant in the matter of 
granting permits for the creation of power and less complaisant in 
the matter of granting privileges and franchises than the Canadian 
authorities. 

Mr. Stetson. May I interrupt? Mr. Woodruff will permit me to 
say one word, as he is going away, and I ought to call his attention 
to the fact that that statement would be absolutely challenged, and 
to state that no permit has ever been requested of the commissioners 
and could not be given. 

Mr. Woodruff. Does that refer to all applicants? 

INIr. Stetson. The Niagara Commission, on the New York side, 
never had a bit of power to grant any such permits. 

Mr. Woodruff. It could not grant a permit to take water outside 
of the limits of the reservation. 

Mr. Stetson. Nor inside of it, either. They never had any re- 
quests. 

Mr. Woodruff. Mr. Stetson's suggestion or statement, Mr. Secre- 
tary, simplj^ causes me to say what I am very glad to say, that evi- 
dently they were well advised, knowing what the situation was, and 
18447—06 4 



50 TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 

they did not make application here because they felt that the po^Yel• 
did not exist, or because they felt that the application would not be 
received with so friendly a spirit. The main truth of my contention 
therefore remains unchallenged. I am advised that they have made 
no formal application, but you and I both know that very often 
favors are not asked because of foreknowledge that they will not be 
granted. 

I know, in the State of Pennsylvania, within the last four years 
numerous pieces of legislation that had been prepared were not pre- 
sented because Governor Pennypacker was known to be hostile to 
them. These parties can say that they never made application, but 
they did not make application because they knew their application 
would meet with an adverse fate. These companies have gone to the 
Canadian side, because they feel that they could make better terms 
there. That being the case, does not that discriminate against our 
own American commissioners in the State of New York, and put a 
premium upon the complaisance of the Canadian authorities, by 
granting to Canadian companies all the rights and privileges which 
they would have if they were organized and erected upon this side 
of the boundary line? 

One other thought, and that is this: I may be reiterating some of 
the points made by my i:>redecessors, but I want to present them, as 
Mr. Stevens has said, from a little ditferent point of view, so as to 
have before you all of the facts in the case. This is a matter of great 
importance, as it affects not only our own generation, but, as Presi- 
dent Roosevelt has said, generations 3^et unborn. We can only even- 
tually and effectually preserve the falls for all time through inter- 
national action. Something must be done by the joint action of the 
British authorities and ourselves. Are we acting as we should when 
we establish, as we certainly would establish if you were to grant the 
full request of the applicants here or on the other side of the inter- 
national boundary line, vested interests so strong and powerful that 
it would be almost impossible and possibly impracticable to divest 
them? I submit to you, sir, that in deciding this matter, as you are 
called upon under the Burton Act to do, you should bear in mind that 
your action will have not only an immediate but a future effect, and it 
is wrapped up in a most direct way with the question of the future 
preservation of these falls. A grant of the applications that are 
made here would unquestionably tie the hands of our Secretary of 
State and President in any negotiation which they might undertake 
with the British authorities looking toward a complete preservation 
of Niagara Falls. 

Mr. McFarland. Mr. Secretary, as a matter of fairness, do you not 
think I ought to have a chance to make some explanation of what you 
seem to think is a misstatement by me? 

Secretary Taft. Yes, sir; at the close. 

Mr. Stetson. In order that there may be no misapprehension as to 
the relative waters taken from the Falls, I understood the professor 
to say that it was one to five. 

Secretary Taft. Yes, I understand it to be stated as even more. 

Mr. Stetson. A much larger proportion. That is based, I think, 
on the width of the stream — -the flow\ It is exactly in proportion to 
the width of the two streams on either side of Goat Island. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 51 

Secretary Taft. I have heard it stated to be one-tenth and nine- 
tenths. 

Mr. Stetson. I simply wanted to correct any misapprehension. 

Judge Potter. I desire to say, as the question has been raised by 
Mr. Stetson, that there is no question about what the commissioners 
of the State reservation have done. Our powers are very clearly de- 
fined in the statutes. 

Secretary Taft. I understand you have been consistent in your de- 
sire to reduce the amount of water taken, but that the legislature did 
not always follow your views. 

Mr. Stetson. I would like to ask Mr. Potter if he has ever known 
of a request coming to the commissioners for power. 

Mr. Potter. No ; I have been advised that it has, before my time, 
but I have not had much familiarity with that. But no application, 
so far as I know, has ever been made. . We have no poAvers to grant 
anj^thing, and Ave refer everything in the nature of power to the legis- 
lature of the State of NeAV York. 

Secretary Taft. Mr. McFarland, possibly 3^011 Avould rather make 
your statement noAV than to wait. 

ADDITIONAL STATEMENT OF J. HORACE m'fARLAND, PRESIDENT OF THE 
AMERICAN CIA'IC ASSOCIATION. 

Mr. McFarland. I ask to make this statement simply as a matter 
of fairness. If I had made the statement in the circular letters 
(Avhich seems to have excited some ire) that the amount of Avater 
AvithdraAvn Avas equal to the Hudson at Albany, the DelaAvare at 
Trenton, the Potomac at Harpers Ferry, the James at Richmond, 
and the Susquehanna at Harrisburg, do you think it Avould have 
been A^ery much less impressiA^e to the people Avho receiA^ed it? 

Secretary Taft. I think it would. It Avould haA^e been with me. 

Mr. McFarland. I differ Avith you. 

Secretary Taft. Here is what you did say : " It is obvious and 
certain that if the Avater required to make 350,000 horsepower (as 
much as the Hudson, DelaAvare, and Potomac riA^ers combined dis- 
charge at their mouths)." My mind immediatelv Avent doAvn to the 
Potomac at its mouth, as it emptied into the Chesapeake, to the Hud- 
son at New York, and to the DelaAvare River at Cape May. It really 
startled me, and I wondered whether I was engaged in the business 
of wiping out the Niagara River. Then you state on the other side 
of the circular, " If a^ou have written to Secretary Taft, use this 
material for inducing others to Avrite at once."' 

Mr. McFarland. I am in no sense ashamed of it. 

Secretary Taft. It seems to me, considering the facts — I do not 
mean to say that you intended it — but considering the facts, it seems 
to me that was an exaggerated and misleading statement. Do you 
not think it Avas, yourself, to look at it? 

Mr. McFarland. I hardly think I ought to be blamed that you 
considered the estuaries instead of the mouths. My authority for 
the statement is Mr. James H. Fuertes, the Avell-known and eminent 
hydraulic engineer of Ncav York, Avho has been engaged repeatedly 
by the city of New York for important iuA^estigations. 

Secretary Taft. AMiere Avould you say the mouth of the Potomac 
River was? 



52 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 



Mr. McFarland. I never thought about it. I took it as an engi- 
neering statement. 

Secretary Taft. Where do you think the mouth of the Hudson 
River is ? 

Mr. McFarland. I would consider the mouth of the Hudson River 
to be at the point at which the water of the North River blends into 
the water of the East River. 

Secretary Taft. That is below Manhattan Island? 

Mr. McFarland. Right across from the Battery. 

Secretary Taft. Between Governors Island and the Battery? 

Mr. McFarland. Yes, that would be one construction of it. 

Secretary Taft. It is not a question of what is actually the mouth, 
technically speaking, but what this statement would convey to those 
who read it. 

Mr. McFarland. I am under the impression that a majority of 
people who read the statement would have been just as much im- 
pressed if, instead of making it at the mouth, as my engineer ad- 
vised me, I had gone further up and placed it beyond the tidal influ- 
ence; but inasmuch as this document recited the engineer's view, I 
wish to file it. 

Secretary Taft. You may do so. 

Mr. McFarland. I wish to be free from any seeming intention of 
deceiving you or other peoj^le. I had no such intention, and inas- 
much as what ever is said here will be telegraphed over the country, 
if it may be of any assistance to the side we are opposed to, I think I 
ought to go on record as producing my authority. 

Secretary Taft. I think you ought to. 

The document referred to by Mr. McFarland is as follows : 

140 Nassau Street, 
~New York, November 1^, 1906. 
Mr. J. Horace McFarland, Harrisburg, Pa. 

My Dear Mr. McFarland : Your letter was received at my office while I was 
out at the Lyucbburg dam, and was telephoned to me. Naturally I did not 
have the figures you asked for, but inclose them herein, hoping it may not be 
too late to serve your purpose. 

The gaugings on these streams have not been carried on long enough to 
secure very accurate data, and hence I refer to them as estimated. 
With kind regards, very truly, yours, 

James H. Fuertes. 

Estimated flows of several rivers. 



Delaware, at mouth 

Hudson, at mouth 

James, at mouth 

Potomac, at mouth 

Susquehanna, at mouth 



Drainage 
area. 



Square feet. 
10, 000 
13, 400 
9,700 
14, 500 
26, 500 



Total aver- 
age flow, 
per second 



Cubic feet. 
17, 000 
22, 000 
15, 500 
23, 000 
45,000 



Low-water 
flow, aver- 
age dry 
year. 



Cubic feet. 
4,000 
2,600 
1,900 
2,900 
5,000 



Mr. McFarland. Mr. Secretary, is it exactly fair that the Engi- 
neer Department of the Government should take itp the matter of 
challenging these facts, without reference to me at all ? 

Secretary Taft. It seems to, when you send circulars, and an im- 
mense number of appeals to me, and to my discretion, based on these 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 53 

circulars, that the first thing I have to do is to look into the authen- 
ticity and reliabilit}^ of the circulars. 

Mr. McFarland. All right. 

Secretary Taft. And therefore what I did was to refer these to 
Colonel Ernst, and the Chief of Engineers, for verification of these 
statements, which seem to me — with quite an insufficient knowledge, it 
is true, of the matter — to go beyond what the facts justify. 

Mr. McFarland. It is also fair to me to say that there were a dozen 
or more statements in the three circulars of which this was only one, 
and it can hardly be conceived that all this popular expression was 
brought out by that one statement. 

Secretary Taft. The statement I have referred to has been empha- 
sized and enlarged with large type, and it was what attracted my 
eye at once. 

Mr. McFarland. I wished to make it as emphatic as type and lan- 
guage could make it, sir. 

A recess was thereupon (at 1.30 o'clock p. m.) taken until 2.30 
o'clock p. m. 

AFTER RECESS. 

The hearing was resumed at the expiration of the recess. 

Secretary Taft. I understand, gentlemen, that the case for the 
jDublic. the people, has been closed in the opening. They have pre- 
sented certain issues that it seems to me it might be well to have 
answered at once. I assmiie that there is to be some discussion 
between the companies, and therefore I think that discussion ought 
to be f)Ostponed until we take up what, for the moment at least, seem 
to be the chief questions. I therefore would like to have the gentle- 
men on this side arrange how they wish that matter to be presented. 

Mr. Stetson. I have spoken to General Greene, and General Greene 
and Mr. Cravath desire that I should speak. I do not know whether 
my friend Mr. Johnson would like to speak in answer to Mr. McFar- 
land. 

Mr. Johnson. I do not think it requires more than two arguments 
on that particular issue. 

Secretary Taft. Then you will open, will you, Mr. Stetson? 

Mr. Stetson. Yes, sir. 

Hon. Charles H. Keep. There is a point of view here which is of 
great importance, and that is the point of view of the commercial 
communities in western New York, especially those immediately 
along the Niagara frontier. 

Secretary Taft. But it is upon the main issue ? 

Mr. Keep. It is upon the main issue. 

Secretary Taft. It does not relate to the distribution of power be- 
tween the three companies? 

Mr. Keep. No. 

Secretary Taft. Then, as between you and Mr. Stetson, would you 
rather speak now, Mr. Keep ? 

Mr. Keep. I have only the duty to perform of saying that the busi- 
ness communities of Avestern New York are represented here by a 
delegation, and to ask you to hear one representative, representing 
them all. 



54 TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft, I would be glad to hear them. I will hear them 
now, or after Mr. Stetson closes. 

Mr. Stetson. I prefer that they go on. 
Secretary Taft. You can go on, Mr. Keep. 

STATEMENT OF HON. CHARLES H. KEEP, ASSISTANT SECRETARY OF THE 

TREASURY. 

Mr. Keep. Mr. Secretary, the communities to which I have referred 
include, as you are aware, the eighth city in point of population in 
the United States, having a population of about 400,000, and the 
growing cities of Niagara Falls. Tonawanda, and North Tonawanda, 
having in all, over 500,000 people. The commercial plans and the 
prospects of those cities for a period of ten or fifteen years past have 
been connected closely with the development of electrical power at 
Niagara Falls, and its electrical transmission. It is for that reason 
that the Buffalo Chamber of Commerce, the Tonawanda Board of 
Trade, the North Tonawanda Board of Trade, and the Niagara Falls 
Board of Trade have sent gentlemen to represent them at this hear- 
ing. These gentlemen have agreed that their views shall be presented 
by Mr. Ely, and I therefore ask you to hear Mr. W. Caryl Ely, on 
behalf of the commercial organizations of the Niagara frontier. I 
regret to say that Mr. Ely is not here at this moment, although he 
understood that he was to be here at half past 2. I assume he is 
only a minute or two late. 

Secretary Taft. We will wait for him. 

(After a brief intermission). 

Mr. Stetson. Shall I go on ? 

Secretary Taft. Yes. 

statement of FRANCIS LYNDE STETSON, REPRESENTING THE NIAGARA 
FALLS POWER COMPANY AND CANADIAN NIAGARA COMPANY. 

Mr. Stetson. Mr. Secretary, the division of the questions that have 
been suggested by you involves a division in the consideration of the 
brief which I now lay before you, and which covers both branches 
of the question, or both questions, as suggested by you. I will go 
through with the entire brief, or will suspend after referring to the 
general question, as you may suggest. 

Secretary Taft. Mr. McFarland has asked, and I think it is fair, 
that the main issue which has been here discussed as to the construc- 
tion of the law and what I ought to do as against all the companies, 
should be first thrashed out, and that they be allowed then to with- 
draw if they desire. That is what I understand. 

Mr. McFarland. Yes, sir. 

Mr. Cravath. May I inquire if this is the same brief you filed 
several days ago? 

Mr. Stetson. No, this is entirely new. 

Mr. Cravath. Then I take it that on questions as between the com- 
])anies we will be permitted to submit further briefs if we desire. 
You will remember that we all filed briefs about three weeks ago, and 
they were distributed, and we assumed that that closed the briefs. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 55 

Secretary Taft. I am not going to be strict about that. Any light 
I can get I shall be glad to have. 
(At this point Mr. Ely entered.) 
Mr. Stetson. As Mr. Ely has arrived, I will suspend. 
Secretary Taft. We will hear you now, Mr. Ely. 

STATEMENT OF W. CARYL ELY, REPRESENTING THE CHA:»IBER OF ('0M:\IERCE 

OF BUFFALO, N. Y. 

Mr. Ely. Mr. Secretar5% there was a meeting of representatives of 
the Niagara Falls Board of Trade, the Tonawanda Board of Trade, 
the North Tonawanda Board of Trade, and the Chamber of Com- 
merce of Buffalo, held at Buffalo, N. Y., November 19, and those gen- 
tlemen requested me to appear at this meeting for the purpose of pre- 
senting a memorial from the Buffalo Chamber of Commerce, and of 
stating very briefly and generally the situation as it is presented to 
the main body of the representatives of the business interests of the 
Niagara frontier. Of course, there are probably members of any of 
those bodies who may differ with the general consensus of opinion. 
Be that as it may, it seems to be the opinion of those commercial 
organizations as such, that they should be represented at this hear- 
ing, and should be heard in favor of the granting of the permits for 
the transmission of power as recommended in the report of Captain 
Kutz, and the recommendations of those other bodies or commissions 
which, on the part of the Government, in some way have had the mat- 
ter under consideration. 

At the outset, it seems to us that the people who live in western 
New York, near the Falls of Niagara, and practically adjacent there- 
to, and along the Niagara River, have a lively interest not only in the 
])roper utilization of the energy of the Falls, but also in the preserva- 
tion of the Falls unimpaired as a great natural wonder, attracting to 
that locality hundreds of thousands of people every year, and who 
contribute materially to the welfare of all those communities. The 
first development on the American side by the Niagara Falls Power 
Company and the Niagara Falls Hydraulic Power and Manufactur- 
ing Company, which Avas prior even to the Niagara Falls Power Com- 
pany, gave a stimulus, an undoubted stimulus, to the growth of that 
section of the State. At the time of the granting of the rights by the 
State of New York to the Niagara Falls Power Company there was 
rather a stagnant condition of business and growth in that locality. 
Since the time of the granting and the exercise of the rights by those 
two companies on the American side, and the granting of the rights 
and their exercise on the Canadian side, among which have always 
been esteemed and estimated this right of transmission to the Amer- 
ican side of a portion of the power generated in Canada, there has 
been a very great growth. 

On the American side, right at the Falls, the two country villages 
of Niagara Falls and Suspension Bridge, with small interests, have 
come to be a thriving and prosperous city, and thousands of people 
have moved from their former habitations to that locality by reason 
of the prosperity enjoyed consequent upon the development of the 
power of the Falls. Buffalo has increased tremendously in the last 
five years. It is pointed out in this memorial of the Buffalo Chamber 



56 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

cf Commerce that the increase in industrial establishments, as indi- 
cated by the recent Government census, is in 1905 over 1900 in capital 
invested more than 44 per cent, in the number of wage-earners more 
than 27 per cent, and in the value of manufactured prochicts about 40 
per cent. 

I do not think that any of the opponents of our desires in this mat- 
ter would for a moment deny that Niagara power had more than an^J 
other thing contributed to produce that great increase. 

Now, we live there; our businesses are there; our fortunes are 
invested there, and all of the people ought to have some fair and 
honorable views concerning the situation. I have had to do, in a 
small way with the formation of the Niagara Falls Power Company, 
Inlaying some part therein, and in the formation of the International 
Railway Company. It was my good fortune, also, by reason of being 
a member of the legislature of the State of New York in 1883, when 
the preliminary bill providing for the appraisal of lands at Niagara 
for a State park was passed, and again, in 1885, when the appropria- 
tion was made for taking over the lands, to play some part in those 
matters. Indeed I might say, if I were not transgressing upon your 
time, that there was a sentiment so strong and powerful in me that 
notwithstanding the fact that I represented a district in the interior 
of the State purely agricultural, not having any manufacturing 
within its boundaries, I was moved to take my political life in my 
hands and vote for the legislation to make the Falls free. But I 
never subscribed to doctrines that were Confiscatory or semiconfisca- 
tory. 

If I were to differentiate between the positions taken by some of 
my friends and some of the people here this morning in apposition, it 
would seem to me that in almost all of the appeals that have been 
made to you, Mr. Secretary, to deny these permits, there has been 
present a confiscatory or semiconfiscatory sentiment. 

It is a condition and not a theory that confronts you, sir. You are 
here to do something. I do not come here to argue questions of law 
nor to undertake to occupy legal positions. Eminent counsel here 
will take care of our interests in those regards, but I speak from the 
standpoint of a layman. If it is not the pur230se to grant permits 
for the development of power, then, to use the words of the immortal 
Flannigan from Texas, '' what are we here for ? " 

If the Congress of the United States had intended that no permits 
should be granted it would have confined its enactment to the first 
few sentences in tlie bill, and would have said simply that the Govern- 
ment of the United States hereby prohibits the taking of water from 
the Niagara River for the development of power, and then it would 
have been up to those interested to ascertain whether it was a consti- 
tutional exercise of power on the part of the Congress. Instead of 
that the Congress has provided that you may in your discretion issue 
permits, and I was struck — not attempting to sa})' anything that may 
be complimentary at all — by the language that was employed by your- 
self, sir, when you said: 

The integrity and the volume of the Niagara River shall not be seriously 
impaired, on the one hand. anYl the capital which has been really invested and 
involved in the structures now entered upon, and the plant now contracted for, 
and the contracts now made, may not be so injured in its profit producing as 
that this act may oyierate as a practical confiscation of pro])erty. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 57 

And that brings along Avith it the remembrance of the remark you 
made this morning, sir, that " justice should be done." It seems to 
me clearer that the object of this legislation was that justice should 
be done to everyone, to all the peoi^le of the United States who desire 
the preservation of this great cataract, this great natural w^onder, 
and to such of its citizens as are dependent upon it in the way of and 
by reason of great investments that have been made, founded upon 
faith in the statutes and contracts under which those relations were 
entered into. 

I am not here to argue any of these questions in favor of the 
power companies. I am here against my will, because I was asked 
to come by these commercial bodies, and only as late as two or three 
days ago. It seems to me, sir, that those gentlemen who appeal the 
granting of these permits are mistaken in what they urge to be the 
proper wa}" to get a treaty from these foreign governments with 
whom we must deal, because the Canadians have their finger in this 
matter as well as Great Britain, and if I mistake not, are becoming 
more and more jealous or the Canadian government is becoming 
more and more jealous of its prerogatives. 

To deny at this time the granting of any permits, thereby denying 
to the citizens of this country rights wdiich they have endeavored to 
obtain by contract with the Canadian government, or the Province of 
Ontario, rights which such governments have in the most sacred man- 
ner endeavored to bestow, might produce an impression that dis- 
courtesy and haste had been exercised by this Government, and that 
no treaty at all, possibly, should be made; that we, having acted 
hastily in denying recognition of rights Avhich the Canadian govern- 
ment has undoubtedly endeavored to confer, had cut ourselves off 
from an approach through the regular channels of diplomacy. 

It seems to me that the rights that have been created on the Cana- 
dian side are and ought to be regarded as being in law and in fact 
very greatly different from those that have been created on the Ameri- 
can side. The development of power on the American side of the 
river has been by corporations of the State of New York, created for 
that purpose, but enjoying those rights and exercising them, not upon 
the lands of the State, but the private uplands, of which they own the 
legal title, adjacent to the bed of the Niagara River, the property or 
the fee of which to the center thread of the stream it has been held is 
vested in the people of the State of New York. As I understand it 
nobody owns the water that nms over it, not even the Government of 
the Uuited States. 

On the Canadian side development has taken place by direct con- 
tractual relations between the companies which are making the 
improvements and the Canadian government. The structures and 
works are built upon lands belouging to the Province of Ontario, the 
dominion of the Queen Victoria Niagara Falls Park itself. I have 
been to some extent familiar Avith the progress of that development, 
as a close observer for a period of more than fifteen years, and I do 
not think there has ever been more care and deliberation used under 
similar circumstances than has been used by the Canadian govern- 
ment and by the Province of Ontario. All the plans of all the 
structures and all the works have been worked out under contracts 
which have been formulated by the commissioners of the Queen 
Victoria Niagara Falls Park, under the direct sanction and with the 

\ 



58 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

direct participation of committees of Parliament and cabinet minis- 
ters, and the greatest care and deliberation has characterized the 
matter from its inception. 

After the Canadian government — its ProAdnce of Ontario — shall 
have created these rights, reserving a rental from every horsepower 
Avhich has been developed, which rental goes towai'd the payment of 
the expenses of the government, does it stand to reason that because an 
outcry is raised that the scenery of Niagara Falls is about to be im- 
paired, the Canadian government will stop that development ? Is it 
not within our observation everywhere that where vast amoiuits of 
capital are invested in that way they are taken care of, and are per- 
mitted to work out their legitimate functions, especially where those 
matters have all been matters of governmental creation? 

Again, if 160,000 horsepower is to be generated from the waters of 
the Niagara River by Canadian diversion, it seems to me that the 
question conies with great force: Why shall we not employ that, if we 
may, for the upbuilding of the State of New York, and the people of 
this country and their material welfare and convenience, rather thari 
to let it go for similar purposes to the upbuilding of Canada ? There 
is an element of selfishness which may pervade any such argument as 
that, but business is business, and this is largely a question of business. 
It seems to me it may be considered as such, especially if it is correct, 
as set forth by the reports of engineers and the opinions of men of 
great ability and experience and observation in this particular matter, 
that water sufficient to create the desired amounts of power may be 
taken from the river without impairing the grandeur of the cataract. 

I was much struck, sir, by the questions which 3^ou addressed this 
morning to some of the gentlemen, as to whether or not they were in 
favor of construing the language of the act to mean that practically 
not one drop of w^ater should be taken away from the Falls. 

Secretary Taft. To go back a little in your argument, you say 
it is better that w^e should have the 160,000 horsepower than that it 
should be used in Canada. 

Mr. Ely. Yes. 

Secretar}^ Taft. That does not quite state the situation, does it? 
In other words, if we do not take it it will not be used at all? 

Mr. Ely. I can not subscribe to that, from my experience as a busi- 
ness man. The energy and the financial responsibility and substan- 
tiality that has brought about those structures will bring about the 
utilization of powder to be generated therein. 

Secretary Taft. No; but the idea of Congress was doubtless this, 
that as the}" restricted the electricity brought across the river they 
would restrict the use to Avhich Canada would be likely to put the 
water of the ri^'er, at any rate, because if there Avas no demand on 
this side of the riA^er there Avould not be demand enough to take much 
Avater out of the stream on the other side. Is not that the theory ? 

Mr. Ely. I should say that Avas the theory, but I have had con- 
siderable difficulty in determining just what the different theories 
Avere. As stated by Judge Potter and Mr. Stevens, they Avere very 
clear, but concerning manj^ of the other statements I have been forci- 
bly reminded of a sentiment expressed by Josh Billings, and to Avhich 
I ahvays subscribed : " That it is better not to knoAV much than to 
knoAv so much that aint so.'' It is difficult to bring out of the 
attempt to manufacture sentiment in this case anything except a 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER, OVI 

radical and reckless attempt to befog the situation, and to surround 
the Secretary of War with a set of annoying circumstances — to pre- 
vent him, rather than to assist him, in the discharge of his duty in 
the premises. 

In regard to the utilization of all the power that the Canadian 
comjDanies have the right to generate — and that is what I understand 
you to direct my attention to — the uses of electricity have within the 
past few years become so extended that it seems reasonable, does it 
not, to suppose that within a reasonable time it would be possible to 
utilize in Canada all the power that the Canadian companies might 
genetnte? It is only within the last tAvo or three years that the New 
York Central Railroad has contemplated and set about the electrifi- 
cation of a 30-mile zone in and about New York City, and already 
the Pennsylvania, the New York, New Haven and Hartford, the 
Long Island, and the Erie and other trunk lines of railroad are doing 
the same thing in one place and another. 

Based uioon the experience of the past few years, I should say it 
is only a question of a few short years when all of the power produced 
in Canada might be utilized in Canada. Where vast sums of money 
like these are invested they make uses. The interests that have located 
there, these great works, will locate others in which to utilize the 
power. Canada is very active. Why, Canada is pulsating with the 
very energies that have built up this great nation of ours. The Cana- 
dians, it has been said, are slow. I should say that it might properly 
be said they have been slow, but Canada is not slow to-day. Her 
attempts to confine manufacturing within her boundaries are leading, 
almost every day, to the location of factories by Americans wathin 
the borders of Canada, in which to make the things to be sold to the 
Canadians; because to-day we are shut out of Canada by very high 
protective duties, such as we ourselves have put up against other 
nations. They have now been put up by the Canadians against us. 
Several great works are being located in the neighborhood of Niagara 
Falls. 

Secretary Taft. If I Avere confident that all this power could be 
taken on the Canadian side I should not feel quite so anxious with 
reference to the question of the confiscation of the property by deny- 
ing the right to bring electricity over. 

Mr. Ely. I am quite well aware that mj statement has its bearing 
in both directions, just as Mr. Stevens' statement had its bearing in 
both directions. He said, " We do not want the power brought across, 
because it will run railroads; it will cause the building of railroads, 
and of factories, and the employment of people." The converse of 
that proposition is also true; w^e want it for that very reason; and 
that is Avhy the chambers of commerce of Bufialo and those other 
cities are represented here — because they do want the power to come 
over for their own upbuilding. 

With regard to the amount of diversion that Avill Avork an impair- 
ment of the scenery, you have the reports of your engineers — the evi- 
dences of your own senses. 

Niagara appeals to the human mind through the channels or 
avenues of the eye and the ear, the sight of all its grandeur spread 
out, accompanied by the thunder and noise that have attracted the 
attention of cA^eryone since the Indians AA-ere first amazed by it. 
Those are the things that produce tlie impression upon the human 



60 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

mind. If a large quantity of water may be diverted from the river 
and utilized for the benefit of mankind, and at the same time enough 
be left not to imjjair the grandeur of that spectacle and its force 
upon the human soul and mind, are we not serving two laudable 
purposes at one time and the same time ? 

It has been said, Mr. Secretary, by many men, many great men 
who have no interest whatever in the development of power. at Niag- 
ara Falls, that the idea of the development of a mighty power from 
that cataract and putting it to the uses of mankind has been as pow- 
erful to impress their souls and minds as the natural power of the 
cataract itself. Are we not always greatl}^ moved by the performance 
of a great work by man? Is not the spectacle of Niagara to-day 
greatly more edifying, and is it not producing a greater effect upon 
human beings who see it than it was when it all ran wild to the sea? 

I know some will find fault with the looks of some of the struc- 
tures, and some will point out this and that and the other things, 
but upon the whole, is not the work that man is doing at and about 
Niagara Falls creating an accompaniment to its natural grandeur 
that increases the effect that will be produced and must be produced 
from now on upon the people who go there to look upon it ? 

With regard to the effect to be produced upon the Horseshoe Fallg 
by the diversion of about 13,000 cubic feet of water on the Canadian 
side, between the Falls and the crest of the natural rock dam which 
separates the rapids above the Falls from the upper river, I have 
this suggestion to make: From the report of Captain Kutz it appears 
that there is now being diverted and utilized on the American side of 
the river about 13,000 cubic feet per second, and I have yet to find 
those who are familiar -with this stream from constant observation 
and being almost daily brought into contact with it who say they can 
perceive any diminution or that there has been any visible impair- 
ment of the volume of water passing over the American Falls. If 
the like amount is diverted on the Canadian side, where the flow is 
many times greater, does it not stand to reason that it would be 
imperceptible, and if imperceptible then how is the grandeur of the 
cataract impaired, and in what way is it detracted from? The com- 
parative statements that have been made concerning Niagara and the 
volume of water that has been and is to be abstracted therefrom are 
very misleading in their character, as you have already pointed out. 

Wliy, I have seen publications in the newspapers within the last 
year and a half that would lead one to believe that Niagara was 
already running pretty nearly if not quite dry. Pictures of Niagara, 
desecrated by these corporations that have conmiitted the assaults that 
some of our friends talk about, that showed the bare rocks in the river 
running dry. As a matter of fact the water has been higher in the 
river for two or three years, or a couple of years, than it has been 
for a long time before; and, as a matter of fact, the blowing of the 
east wind or the bloAving of the west wind upon the breast of the 
waters of Lake Erie makes high or low water in the Niagara Elver, 
and has done so ever since I have known it and been conversant with 
it, twenty jenrs and more, during about thirteen years of which I, 
as a lover of the cataract and the stream, used to see it many times 
every week. 

It has been stated by the State geologist that there have been ice 
dams in certain places above the rapids within the last two years, 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 61 

but it is equally true that there were ice dams there before, and many 
of them, some of them being so curious in their nature as to have been 
made the subject of public record by persons interested in the 
spectacle. 

We believe it is possible to grant these permits as recommended by 
Captain Kutz, and not injure or impair the scenery of the Falls, and 
we feel that justice will be done by that disposition of the matter be- 
fore you. 

The United States Government certainly is not called upon to exer- 
cise some great, mighty, mysterious, and inchoate power to do some- 
thing to this stream. That is not called for. The United States Gov- 
ernment is not going to deprive any of its citizens of their property 
without making due compensation therefor, and why should we not 
proceed in disposing of these matters along intelligent lines, and when, 
if ever, Niagara shall be impaired in her beauty or grandeur, then 
let compensation be made, fair and just compensation, and all the 
water of the Falls resumed by the Government if such shall be the 
desire. 

It never was intended by this legislation that contract rights that 
have been created and which are beneficial to hundreds of thousands 
of the citizens of the State of New York and of the United States 
should be interfered with arbitrarily, nor that rights upon which 
millions of dollars have been expended and upon the faith and re- 
liance in which thousands of people have changed their habitations 
and removed to places about the Falls should be rudely stricken down. 
On the contrary, as it has seemed to me was justly. interpreted by the 
Secretary, those rights and investments of capital should be preserved 
in so far as was not inconsistent with preserving the integrity of 
the Falls themselves. 

I do not feel very well satisfied with what I have said. I have had 
very little time for preparation. 

In conclusion, I must say that it seems to me that the field of senti- 
ment has been unfairly invaded ; that some one has run amuck 
among the good-feeling aesthetic peoj)le of the United States, and 
as usual under such circumstances produced harm rather than benefit. 
Sentiment governs the most sacred relations of our lives. Almost all 
marriages in this country are matters purely of sentiment, and the 
family is the very foundation of our institutions. Sentiment governs 
us in our best actions, but that is proper sentiment founded upon 
fact and correct conception. Sentiment that has been produced by 
misstatements and garbled facts, for the purpose of bringing pressure 
to bear upon public officers in the discharge of their duties, is 
unworthy of attention, and it dishonors those who, yielding to it, join 
in an unworthy undertaking, and disgraces those who are guilty of 
working it up. I can not refrain, sir, from making this allusion to 
the methods of some of those who have sought in an improper way to 
create an atmosphere here that would render it difficult for you to 
dispose of this matter in any other than the way consistent with 
their desires. 

I will be glad to file this short memorial from the Chamber of 
Commerce and thank you very much for your courtesy. 



62 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

The iiieinorial referred to and certification accompaiiying same 
were as follows: 

Before the Secretary of War. 

In the matter of the application for permits under the act entitled, "An act for 
the control and regulation of the waters of the Niagara Rh'er, for the 
preservation of Niagara Falls, and for other purposes," approved June 
29, 1906. 

To the Hon. William II. Taft, Sccreturii of War: 

The Chamber of Commerce of Buffalo, the leading commercial and civic 
organization of the city of Buffalo, respectfully submits this memorial, not in 
the interest of any power company or transmitting company seeking permits for 
the diversion of water or for the transmission of electricity, but for the express 
purpose of presenting to you the views of the citizens of Buffalo upon the 
questions involved, growing out of the act of Congress approved June 29, 1906, 
known as the Burton bill, and described in its title as "An act for the control 
and regulation of the waters of the Niagai'a River, for the preservation of 
Niagara Falls, and for other purposes." 

The city of Buffalo has attained a prominent position among the commercial 
cities of this nation, as well as of the world, its water-borne commerce for the 
season of navigation of about seven months aggregating approximately, lake 
and {-anal, 14.(>()().o00 net registered tons; the fourteen trunk lines entering the 
city reaching nmre than one-half of the poi)ulation of the United States and 
two-thirds of Canada, within a day's ride, with their enormous through and 
local freight tonnage, make Buffalo one of the chief railroad cities of the con- 
tinent. The most promising development, however, of Buffalo in recent years 
has been the rapid extension of industrial establishments, as indicated by the 
Government census, which shows the following i)ercentages of increase in 1905 
over 1900. namel.v, ca))ital invested, 44.6 per cent; number of wage-earners, 
27.1 per cent; \-alue of products. oO.G per cent. 

This industrial development is believed to be due to the unexcelled trans- 
portation facilities by lake and rail, the low cost of sites for industrial estab- 
lishments, and above all, the electrical development at Niagara Falls, giving to 
these establishments power at a less cost than can be generated by steam. Your 
action, therefore, upon the applir-ations for the diversion of waters for the gen- 
eration of electricity at Niagara Falls and the transmission of electricity from 
Canada into the United States is momentous to Buffalo and the frontier, and 
essential to our further growth and development. 

The Burton l)ill was enacted into law primarily for the preservation of the 
scenic beauty and grandeur of Niagara Falls, and with others, we believe the 
enforcement of its provisions would accomplish this end. The president of 
the so-called American Civic Associaiton, however, continues his attack, with 
the aid of a publishers' association, and through the distribution of thousands 
of circulars, seeks to manufacture sentiment that there is danger to the Falls. 
We should like to feel assured that his efforts are actuated by the motive to 
preserve the integrity of the Falls for all the people and not to destroy the 
natural advantages and resources which Buffalo and the frontier enjoys as 
against rival localities for industrial enterprises. Our attention, however, in 
tills regard is naturally arrested by his own statement. ■ 

" The result of permission to develop and Introduce the vast amount of power 
in the present enterprises, even if successful, would be to produce about Niagara 
Falls a most unwise industrial congestion." 

This is the keynote of all the agitation that Niagara Falls must be saved. 

We respectfully commend the honorable Secretary of War for the view ex- 
pressed of the task imposed upon him under the law, that — 

" The integrity and volume of the Niagara River shall not be seriously im- 
paired, on tiie one hand, and the capital which has been really invested and 
involved in the structures now entered upon, and the plant now contracted for, 
and the contracts now made, may not be so injured in its profit producing as 
that this act may operate as a practical confiscation of property." 

We protest against the demand for the American Civic Association that the 
people of this nation be called to — 

" Tell him you believe the United States is rich enough to buy back, if neces- 
sary, and to own Niagara Falls undamaged regardless of any selfish corporate 
interests," for we have grave doubts whether or not there could be manufac- 



TRANSMISSION OE POWER FROM THE NIAGARA RIVER, (53 

tured st'iitinient tliriUi«li!Uit this laud that the United Stiites expend upwards of 
$5().n( )().()()() " to own Niagara Falls undamaged." 

The Chamber of Commerce therefore in conclusion respectfully submits : 

First, that the State of New York and I'rovlnce of Ontario and the United 
States have provided sufRcient legislation for the preservation of the scenic 
beauty and grandeur of Niagara Falls. 

Second, that the amount of water authorized under the law to be diverted for 
the generation of electricity and the amount autliorized to be transmitted from 
Canada to the United States generated fr<ini the waters of the Niagara Kiver 
will not impair the grandeur and scenic beauty of Niagara Falls. 

Third, that the manufactured sentiment presented to our public officials, 
charged with the performance of a specitic duty, should not be given consider- 
ation in the determination of tlie questions involveil, and to which such com- 
munications relate. 

Fourth, that Buffalo and the Niagara frontier should not be deprived of the 
benefits {lowing from the development of their natural a<lvaiitages and re- 
sources, where such development imposes no injustice or works no injury to 
the pul)lic or rights of the public in a public stream or public spectacle. 

The Chamber of Commerce therefore respectfully requests that permits be 
issued for the diversion of the waters of Niagara River and for the transmis- 
sion of electricity into the United States from Canada generated from the 
waters of Niagara River, as authorized by tlie act of Congress approved June 
29. 1900. 

Dated: Buffalo. N. Y., November 20, 1906. 

Chamber of Commerce of Buffalo, 
By Dr. William II. Gratwick. Prcsidoit. 

F. Howard Mason, Secretary. 

Before the Secretary of War. 

In the matter of the application for permits under tlie act entitled "An Act 
for the control and regulation of the waters of the Niagara River, for the 
preservation of Niagara Falls, and for other purposes," approved June 29, 
1906. 

I. F. Howard Mason, secretary of the Chamber of Connnerce of Buffalo and 
secretary duly chosen at a meeting of representatives from the Niagara Falls 
Boaitl of Trade. North Tonawanda Board of Trade, and the Chamber of Com- 
merce of Buffalo, held at Buffalo, N. Y., November 19, 1906, do hereby certify 
that the following is a true and correct copy of a resolution duly adopted at 
said meeting : 

Jir.solrcd. That the chairman (Mr. William H. Gratwiclc) be, and he is 
hereby, requested and authorized to invite Mr. W. Caryl Ely. of Buffalo, to pre- 
sent the views of the commercial organizations here represented at the hear- 
ings before the honorable' Secretary of War. Noveml)er 26, 1906, upon the ap- 
plications foT- permits under the act of Congress, entitled "An Act for the con- 
trol and regulation of the waters of the Niagara River, for the preservation of 
Niagai'a Falls, and for other purposes," ap]»roved June 29, 190(!. and to urge the 
granting of such permits for the transmission of electricity into the United 
States from Canada, .-ind for the diversion of the waters of Niagar.-i River for 
power purposes, as in the judgment of the honorable Secretary of War will 
make effective the provisions of the act of Congress aforesaid and promote the 
industrial and commercial development of the Niagara frontier. 

In witness wheivof. I have hereunto set my hand at the city of Buffalo. N. Y"., 
this 24th day of November. 1906. 

F. Howard Mason. 

Secretary Taft. Mr. Stetson, you may no>v proceed. 

STATEaiENT (CONTINUED) OF FRANCIS LYNDE STETSON. 

Mr. Stetson. Mr. Secretary, this question Avliich is now before j^ou, 
as I apprehend it, concernino- the distribution of the amounts of 
power to be taken .severally by the different companies upon the re- 
port of your engineer as to the aggregate amount of power to be 



64 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

taken by companies from the Canadian side and transmitted to the 
United States, is ditit'erent from the question of how much power can 
be taken in the aggregate from the Niagara liiver on both sides. 
That is the question that I supposed was discussed, and fully dis- 
cussed, before you last July at Niagara, when 3^ou had the great ad- 
A^antage of taking the evidence of your own senses as to what was 
occurring to the river as a whole. 

But unless I misapprehend the scope and effect of the arguments 
this morning, and the scope and etl'ects of the arguments and appeals 
that Mr. McFarland has addressed to the public, that question as to 
the effect upon the Niagara River as a whole, which we supposed was 
argued and settled, so far as argument was concerned, last July, now 
has been brought up again, and thus we are compelled to turn our at- 
tention again to that question, as to Avhich I stated at the close of 
the argument last July, we readily acquiesced in the statement and 
the wisdom of the statement of the Secretary of War, that those 
matters should be referred by him to his master — that is, to the 
American members of the International Waterways Commission and 
to the Board of Engineers of the Army — for report ; and we have not 
come here with any idea of contesting that report upon the main sub- 
ject. But we are forced to take your time for a few minutes con- 
cerning that branch of the question, because of the voluminous, and, 
I might sa}^, in some respects venomous, attacks that have been made 
u]3on our positions. 

Out of the volumes of speech that were uttered this morning one 
stood out conspicuous from its knowledge of the facts, and I shall 
esteem it always a privilege to have heard Professor Clarke in his 
address. Such a speech as that, to whatever conclusion it leads, is 
a speech that fair-minded men should welcome, and concerning which 
fair discussion can be had ; and with the highest respect to the emo- 
tions of some of the other gentlemen, I must respectfully say that it 
is the only speech that I have heard since I have been here that 
requires consideration. 

Last July I took considerable time, as before this entire debate is 
closed I shall ask to take some time again, in asking your honor to 
discriminate between those who are using* Niagara power. The 
power that one man takes from the Niagara River, an amount of 
power which is absolutely inappreciable in its effects upon the river, 
does not justly condemn that man or his investment to denunciation 
or destruction because of that which may be done by others who come 
after. I have insisted upon that before, and I shall insist upon it 
again with all the force that I can command. I Avish gratefully to 
acknowledge the contribution to that feature of Professor Clarke, 
whom I never saw before and of whom I never heard before, except 
for his high official position, and Avhose statement in that particular in 
recognition of the Niagara Falls Power Company was as entirely 
impartial as I believe it was effective. 

Professor Clarke uttered his sentiments with reference to nature, 
with reference to natural objects, with reference to this particular 
natural object, in some respects the greatest of all natural objects 
in the world, and certainly the greatest natural object in northeastern 
America, and he expressed his interest in it and his loA^e for it. He 
expressed his desire to perpetuate and to protect it, even, if left to 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 65 

himself, to the extent of going to the verj^ point of prohibiting the 
use of any water of the Niagara River for industrial purposes; and 
he seemed to suggest what General Ernst intelligently and acutely 
observed in the report a year ago — that the characteristic quality of 
Niagara which impresses the human mind is not in its surrounding 
scenery, not in the general height of the Falls, but rather in its vol- 
ume. \yhen Mr. James C. Carter made his great address at the time 
of the opening of our reservation — for New Yorkers are not all in- 
different to the value of the Falls; no other people have submitted 
to taxation for the preservation of that beauty as they have; we 
have spent millions in doing it — at the opening of the park result- 
ing from those expenditures Mr. Carter made the address in which 
he attempted to define what it was that gratified the human mind 
in the contemplation of this sublime cataract and, finally, he came 
to the point that it is " the sense of power." That is the quality 
of the cataract that affects the human mind. It is not beauty alone; 
it is not height alone; but it is volume and velocity plus the drop. 
I do not believe that before these latter days any man ever went 
there, Avhether or not he had mechanical ideas, without sa3dng: 
" What could that do for the use of mankind ?" 

I will go further. Professor Clarke justly professes his love for 
Niagara Falls. Mr. McFarland has Avritten much on the subject, 
but in what he has written he has seemed to me to express not senti- 
ment, but sentimentality. I have not discovered a thought under- 
lying anything he has written that stirs the heart with the im- 
pulse of recognition of beauty or of power as da the words of Mr. 
Carter, or the acute definition of General Ernst. 

I will go further. These gentlemen speak of Niagara and its 
beauty. I defy anyone in this room or elsewhere to compare with 
me in my love for the beauty of Niagara. I have studied it for more 
than twenty years from every point. I know it; I love it. I have 
listened to its sound. You think you have. You have never heard 
it. Professor Lupton, of Leeds, England, said to me one day : " Has 
Niagara a sound?" I said: ^' Yes, of course, a mighty sound." He 
said : '" When I went away and looked at my notebook, I could not 
find that I had entered that it had a sound." He said : " I will 
listen for it." I went there again and listened and then inquired for 
an answer. He said : " Yes ; it has a sound so deep and low that it 
has been questioned what would be the length of the organ pipe 
which would produce it." 

It is not the thunder that you hear. It is not the thunder of the 
cataract that Mr. McFarland has pointed out to you. It is a deep 
diapason, that goes down way under the bubble and rush of the 
waters, which is the profound note of Niagara. Such is the sound 
that will control the disposition of the present question as against the 
bubble and froth and foam, not those of the great American j^eople 
who understand the question, but of those who are engaged in the 
kind of agitation that amounts to little more than the blowing of soap 
bubbles. Do they love Niagara? I love it far more than they. I 
have followed its sound, and I have followed its beauty. I have put 
m}' life into it. \Mien Professor Clarke says that he would be glad 
to see removed all buildings near the Falls, I api^reciate his sentiment 
and I go even further than he. I would be willing to give a tenth of 
18447—06 5 



66 TRANSMISSION OF POWER FROM THE NIAGARA RIVER, 

all I have in the world, and more, to restore all along Niagara River 
from Butfalo to Lewiston the glorious forests that once stood there, 
as now they stand on Goat Island; on either side of the stream, to 
restore it in every aspect, in every surrounding, in scenery, in all that 
will constitute the elements that gratify the lover of landscapes and 
the glory of nature, following, as i have many times, the course of the 
river from Chippewa Creek to Lewiston, where you get the counter- 
part of Cole's Voyage of Life; starting in the placid waters of the 
up23er Niagara, with childhood's innocence of danger, then rushing 
through the turbulent rapids and plunging over the cataract of youth 
and early manhood ; coursing through the lower rapids in the vigor 
of full maturity; and at last coming out into life's placid finish as 
you enter the fond and shining embrace of Lake Ontario. 

I defy any man to love Niagara River and Falls more than I. The 
love of those who have spoken in the words of the poet, as compared 
to mine, " Is as moonlight to the sunshine, and as water is to wine." 
1 repudiate and scorn the idea that any advertising agency or propa- 
ganda, however powerful, has a monopoly of the love, or of the proc- 
lamation of love of Niagara and Niagara Falls. 

I maintain, then, that I am entitled to speak as one who knows and 
loves, and would respect and perpetuate Niagara Falls in all its glory 
and in all its sublimity. Is that a mere statement ? Is that contested 
by my acts? Am not I one of these people who would turn that 
power to commercial use? Am not I one of these people who are 
resisting the eiforts of others who, under the sham application of the 
commerce clause of the United States, are endeavoring to turn the 
Federal Government into an agency to destroy commercial develop- 
ment ? Yes, I am ; I am one of those. I think that, within reasonable 
bounds, it is better for mankind that to this extent the waters of 
Niagara River should be so employed, inasmuch as we can not now 
restore the primeval conditions which I woidd prefer. 

I go beyond Professor Clarke and I say that if it were possible now 
to sweep away the villages on both banks, to sweep away everything 
from Lewiston to Bulfalo and to reestablish the primeval forests, it 
would be a sacrilege to permit rural industry to enter such a shrine 
of beauty and sublime power. But the era has passed in which that 
restoration is possible. AYe are dealing with the era of 1878, when, 
under the influence of Lord Dufferin, Governor-General of Canada, 
and Lucius Robinson, governor of the State of New York, an agree- 
ment was reached that upon each side of the river there should be a 
park reservation created and maintained severally by the two govern- 
ments. That movement proceeded to fulfillment, so that in 1886, 
through the results of taxation, there had been developed and estab- 
lished on the American side that park which now is a reservation 
maintained at their own expense by the people of the State of New 
York. On the other side is a park which, as I understand it, was 
expressly declared should not be made a charge upon the people of the 
Province of Ontario. So the commissioners of the Queen Victoria 
Niagara Falls Park, for the creation, preservation, and maintenance 
of that park, have been obliged to seek revenues from the park itself. 
Therefore, as suggested by Mr. Ely, on the two sides of the river you 
are dealing with two different questions. On the Canadian side you 
are dealing almost entirely with the Canadian or provincial 
government. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 67 

I would add that the commission that then sat on the two sides of 
the river undertook, in the exercise of their discretion, to determine 
how much property it was desirable should be taken for the preserva- 
tion of the Falls. Upon the American side, the State of New York 
had sold the American Falls and Goat Island under a soldier's grant 
of 1812, which came into the possession of your predecessor in that 
chair, Gen. Peter B. Porter. The American Falls, having been sold 
to General Porter and continuing in his family ever since, had to be 
bought back by the State of New York at a price of oyer $600,000, 
including Goat Island. There had been no such alienation b,y the 
Province of Ontario, so far as I understand, though there is a gentle- 
man here who can answer as to that much better than I can. 

At all events, on either side of the river the commission exercised 
its jurisdiction and judgment as to how much of the territory sur- 
rounding Magara Falls was necessary for the preservation of that 
object. They made their decision, they made their purchases, and 
they established their two reservations. 

The several governments then passed acts permitting the establish- 
ment of power companies. .On the American side the act was drafted 
by my eloquent and esteemed friend, Mr. Ely, and thereby he and his 
associates, all residents of Niagara Falls and largely riparian owners, 
were constituted a corporation at Niagara, with power to take the 
waters of Niagara for purposes specified in the Now York statute of 
18SG. That is the origin of the Niagara Falls Power Company, of 
which I am now speaking, and of which I am a representative, and 
whicli has been known as the pioneer in the electrical works on that 
particular point. I will presently have something further to say. 

Under those conditions that company got no property from the State 
of New York. That company or its originators owned the water front 
of the Niagara River for 2 miles next above the highest point which 
the commissioners deemed it desirable to carry the reservation for 
the jn-otection of the Falls. Certainly there was no thought of 
encroaching upon Niagara. That was Avhen the question was fresh. 
It was the agreement of the State; it was the understanding of the 
people, and several times it has since been decided that that right of 
the riparian owner was such as to entitle the corporations thus consti- 
tuted to draw the water for the purposes of these manufactures, not- 
withstanding it was a boundary stream, and notwithstanding it was 
a navigable stream; and here I may refer to the decision of Judge 
Childs, in the case of Smith v. Hydraulic Company^ which Mr. Romer 
knows so well, and which was affirmed by our court of appeals. (175 
N. Y., 469.) 

That was the position upon our side of the water — a corporation 
formed by these gentlemen living at Niagara in advance of . the 
cooperation or participation of any of those (excepting Mr. W. B. 
Ramkine) now or for many years interested in the Niagara Falls 
Power Company. 

On the other side of the river a similar act was passed; and Mr. 
Woodruff's statement this morning that all these Canadian companies 
had been established because their promoters were unable to obtain 
the power on the side of the United States was made in violent error 
as to the facts, certainly so far as concerns the Canadian Niagara 
Company. The Canadian concessions began as early as the Ameri- 
can; and they began for the reason I have pointed out, that the 



68 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Canadian commissioners were desirous of obtaining- from the use of 
the park itself, Queen Victoria Niagara Falls Park, the means with 
which to sustain the park. And thereupon a number of Canadian 
gentlemen and Englishmen joined, under the Canadian act, in form- 
ing the association which possessed the Canadian right in the park. 
That had been done entirely anterior to the incursion of the so-called 
vandals, Mr. D. O. Mills, Mr. J. Pierpont Morgan, Mr. Morris K. 
Jesup, myself, and others, who now are supposed to be lacking interest 
in beauty and art. 

Before our incursion all this which I have described had been 
accomplished by law, and these properties were on the market. 
Somebody was going to develop them; and in 1887 or 1888 began the 
discussions which resulted, in 1890, in the present group of capitalists 
acquiring the Niagara Falls Power Company. They never asked 
anything of the New York park commissioners. They had no occa- 
sion to. They were not dealing with the property under control of 
the park commissioners. They were dealing with the property 
entirely above the park. This proceeding on the American side ran 
on for two years, when I was approached personally by Col. Albert 
D. Shaw, formerly a Member of Congress, formerly consul at Man- 
chester, and formerly consul at Toronto, where he became interested 
in Canada. He said : "We are going to build on the Canadian side 
unless you will buy oui- right.'^ What did we do? We bought the 
charter after it had been offered to us. We did not go and seek it. 
Mr. Woodruff is entirely mistaken in supposing otherwise. We 
bought that charter and then what did we do ? We let it lie dormant 
for nine years. If Ave had not thus purchased you would have had a 
Canadian development twice as large years ago. That shows how 
little eager or pressing we were for the purpose of interfering with 
the flow of the Niagara. 

We now come to the year 1892. On our side we had sunk our shaft 
in October, 1890. By that date we had made engagements involving 
millions of money, when that gentleman — who has now gone to his 
rest, and for whom I have only a high respect for his many services to 
the public, for at one time we were close friends, Mr. Andrew H. 
Green, who was a watchdog if there ever was a watchdog — made the 
seventh annual report for the Niagara Falls Park commission, in 
which he made statements" concerning our proposed work which I 
will submit with my remarks. That is the first report that was made 
about our work, and it was published by way not of condemnation 
but connnendation. You will find it stated in the report of that com- 
mission for 1889, submitted to the legislature Januar}^ 29, 1891, that 
there a very remarkable and original development of powei' was 
about to be made by the prominent business men at Niagara Falls. 
We understood that Mr. Green and his associates considered this to 
be an interesting and desirable undertaking. 

We had no word or suggestion of opposition mitil after we had 
committed ourselves publicly to our undertaking, beginning work in 
October, 1890. The report for 1891 called attention to the diminution 
of the water in the Niagara River.'' You will find it in the eighth 

o The seventh annual report, pages 11, 117, was as follows : A-B, pages 11-12 ; 
C-D, pages 117-118. 

6 Taken from twenty-first annual report. E on page 89 to F on page 90. 



TRANSMISSION" OF POWER PROM THE NIAGARA RIVER, 69 

tmniial report for 1801, submitted to the legishitiire January 29, 1892. 
I shall submit it with my argument. It called attention to the low 
water in Niagara River and to the inception and progress of the 
works, and it left it to the public to say whether those works were or 
were not the cause of this low water. That shows the inconsequence 
of mere impressions. That Ioav water that now we hear so much 
about was commented upon in the report for 1891, which w^as three 
years before our tunnel Avas bored through. That goes to show how 
even most intimate and forcible observers may be misled. The com- 
plaint of the eft'ect upon the Niagara River was made three years 
before our tunnel was bored through ; and from personal observation, 
I may say, the water then was lower than it is noAV, and for a series 
of years it had been lower. 

Secretary Taft. Was there not a company before yours taking out 
water ? 

Mr. Stetson. Pardon me. I speak of electrical 

Secretary Taft. I understand ; but with reference to the withdraw- 
ing of water, I mean. 

Mr. Stetson. There was one prior to ours. 

Secretary Taft. ^Mien did that come? 

Mr. Stetson. That company began to flraAv water, I should say, 
about 1857. Mr. Romer is here and can state the facts better than I 
can. How many horsepower do you think you Avere developing 
when we came, Mr. Romer ? 

Mr. Romer. We began in 1853, not 1857, I think. At that time 
there was only one flour mill that was taking poAver, and that ground 
about 40 barrels of flovir 

Mr. Stetson. I mean when we came, in 1889, hoAv much do you 
suppose you Avere taking? 

Mr. Romer. Possible 10,000 horse])OAver. 

Secretary Taft. I did not know but that the report referred to 
that. 

Mr. Stetson. Oh, no ; that had l)een going on for years, that 10,000 
horsepoAver. Mr. McFarland said this morning that you could not 
take out the fifth of a glass of water Avithout noticeable loss. But I 
think that you could take out a fifth of a glass out of the Atlantic 
Ocean and not notice it. Not even Mr. McFarland could haA^e dis- 
coA^ered the loss of 10,000 horsepoAA'er out of the Niagara" River. 
That Avas not the question at all. 

Now I haA^e led up to what Avas actually done b}^ those connected 
with the pioneer electrical development. Here was no assault by 
those gentlemen, w^ho have been sarcastically called " Our Grand 
Dukes," upon the rights of the public at Niagara. On the American 
side, what was done Avas projected by citizens of Niagara Falls who 
owned the riparian lands. On the Canadian side the project was 
authorized by the gOA'ernment itself, in order to create and maintain 
the Canadian case. That is the origin of the two pioneer corpora- 
tions for which I speak. 

Then AA'liat did we do? We made an iuA^estigation — all of us did, 
eainestly — to see whether there could be a possible effect upon the 
Falls by reason of our taking up this first object on the American 
side, and AA^e Cached the conclusion, to AThich I refer again here- 
after, that there Avould not. But Ave let the Canadian side rest in 



70 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

order to demonstrate just what our American action might effect, 
that we might proceed with safety. We intended then, and always 
we intended, to preserve the integrity of the Falls in all their sub- 
limity. AVell, the laws having been passed, and we having acquired 
the rights under these laws which we did not originate, Ave undertook 
to have what was the best possible way of making the development, 
which should be consonant and consistent with the splendid features 
of this great natural object. 

I will not detain j^our honor at length as to that, but will state 
simply that we went abroad ; that we offered prizes throughout 
Europe amounting to $30,000; that personally I made a trip over 
Europe to look at all the methods of power development; that we 
consulted Lord Kelvin, Prof. Williaan Cawthorne Unwin, Col. Theo- 
dore Turettini, and Professor Mascart, of Europe, and Doctor Sellers, 
of this country, and we adopted their recommendations. Wlien Pro- 
fessor Clarke said this morning that it was our sin that we did not 
use but one-third of the power we might have from the water taken 
by us, I would respectfully reply that it is not our sin. If the loss 
be such, then it is our terrible misfortune. Distinguished profes- 
sional gentlemen advised us what to do, and we knew of no better or 
higher authority in the world. We took their advice and followed it ; 
and if we could get back to that date most gladly would we give 
Professor Clarke $500,000 for the formula that would save that other 
two-thirds that he thinks that we are losing. 

Last summer at Niagara Falls Mr. McFarland made an assault 
indiscriminately upon the looks of things and I asked him if he 
would come to our plant. He went with me, and as he stood in our 
power house he could not have the face to stand up against that most 
beautiful installation that had ever been conceived of and say that it 
was such as justified his remarks. No; he said, " You know you are 
a lawyer, and you knoAv when you are making an argument you can 
not weaken it by distinctions," and so he did not distinguish between 
us. He just said indiscriminately that we were all in that condition. 

Now, we have advanced through five years from the beginning. 
On the 1st of June. 1805, our wheels began to turn and they have 
been turning continuously and increasingly from that time to this, 
until, as your honor has ol)served. we have brought out from the 
Niagara Falls Power Company's electrical plant the output, in round 
numbers, of 83,000 horsepower and in the hydraulic plant, converted 
into horsepower, Ave have substantially, in round numbers, 8,000 more, 
making 91,000 horsepoAver, and I believe, though I am subject to cor- 
rection, that Mr. Romer's company is producing thirty or forty 
thousand. 

Mr. RoMER. Forty thousand horsejjoAver. 

Mr. Stetson. There you have the result — 131,000 horsepoAver on 
the American side, AA'hich is. as you found this morning, from an 
eighth to a ninth of the Canadian side. 

That is what is in operation noAv. It is not a question of Avhat is 
going to be. It is not a question of AAdiether, when you look in the 
glass to-day, you see you are a day younger and more beautifid than 
you AA'ere yesterday. It is a question of Avhat has been the effect of 
turmoil and tedium and resistance to assaults for about sixteen years. 
That is the phase that to-day is exhibited and illustrated AAhen you 
look at Avhat noAv is the effect of the AvithdraAval of 131,000 horse- 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 71 

power from the American side, which is one-sixth of the Canadian 
side, or one-ninth of the Canadian side. 

Now, Mr. Secretary, it has been my great privilege and pleasure to 
listen to your decisions for many years, and sometimes, I hope, to 
influence them. Here is a case in which 1 can not hope to influence 
your decision, but. there has been a mightier advocate than I. That 
river which, unlike the Niagara flood, admitted by Mr. McFarland in 
some one of these rooms, thunders its cataract over the falls, spoke 
to you on the 12th day of July last. You stood in front of it and 
you looked at it, and if you had ever seen it before I would defy even 
your acumen to detect a difference in its flow from the time when you 
first saw it, before there were any mills there at all. I have watched 
it for twenty years. Our judgment may be biased. That is all right. 
Charge us with bias; we may be wrong about that. But we insist 
that our judgment is as good as that of the gentleman to whom Mr. 
McFarland has referred when he saj^s '' Recent visitors at Niagara 
Falls report that." Well, we are not " recent visitors at Niagara 
Falls who report that." We are people who have lived at Niagara 
Falls. We are the people who have done more in a day to attract 
attention to Niagara Falls than even the output from Harrisburg. 

The world has been interested in Niagara Falls as it never was 
before. The falls, as General Ernst says, are not conspicuous for 
their height. The falls at Labrador are higher; the Zambese Falls 
in South Africa, the falls in Norway, and in other places are higher. 
Wh}^ is it that the j^eople are interested in Niagara Falls? It is 
because, to use a classic expression, they are "in our midst;" it is 
because we have invested, and for those who are to come after us we 
have invested them with human interest, and that I say, with great 
respect, is quite equal to beauty and to scenic interest. When you 
have got away from the contrary delusion you realize that what we 
and others have done has been an addition — a vast addition — to 
human interest; and I defy you or any man who can speak the 
language of truth, and keep within the bounds of truth, to say he 
can detect a difference visually. 

I do not (i|uite understand the report of General Ernst when he 
says " appreciably affect the Falls." Neither last summer, now, or at 
any time coiQd I willingly be drawn into any statement which 
seemed to conflict with General Ernst ; but I can not believe that 
when he saj^s " appreciable " he means appreciated by the eye. When 
we are talking about scenic grandeur and beauty we refer to the eye 
only, and referring to that organ I defy anyone truthfully to say 
that he can detect the difference between the American Falls as they 
are to-day with 131,000 horsepower subtracted and what they were 
thirty years ago when less than 10,000 horsepower was being sub- 
tracted. 

That, then, leads me to the conclusion, and I hope you may be led 
to the conclusion from an observation of the conditions, that it is 
practically demonstrated that 131,000 horsepower produces no appre- 
ciable diminution, and, inferentially, that 350,000 horsepower taken 
from the Canadian side, which is six to ten times the capacity of the 
American side, and Avhich, as stated by Professor Clarke this morn- 
ing, Avould not affect the American side — I say the inference which 
you are permitted to draw, and which I believe you will draw, is 
that the withdrawal of 350,000 horsepower would not affect the 



72 TRANSMISSIOISr OF POWER FROM THE NIAGARA RIVER, 

Canadian Kails more than the 131,000 horsepower has affected the 
American Falls. 

Professor Clarke made an interesting observation, and I conld not 
quite catch its drift or complete effect, as to the consequence of draw- 
ing down water on the American side, and he said you could draw a 
certain amount upon the American side, in his view, without really 
exposing the bare rock; but, as I understood, he did not think it 
would interfere with the volume and effect, or the volume of the flow. 
May I ask you what that amount was that you then said? 

Doctor Clarke. I do not think I made a specific statement. 

Mr. Stetson. I was not sure whether you did or not. Did you 
mean to say it had reached the limit, or that there was still further 

Doctor Clarke. I should wish to be very guarded in a statement 
of that kind without further thought. 

Mr. Stetson. I would not ask Professor Clarke, then, to answer 
that; but I w^ould be glad if after further thought he would submit 
a memorandum of that to your honor. That is the kind of thought 
I w^elcome here, because we would not want to do anything that is 
going to injure the Falls any more than Mr. McFarland. I am 
glad Mr. McFarland's judgment has not been subjected to the embar- 
rassment of having a financial interest in this question. 

These remarks, as I say, bear generally upon that subject, as to the 
amount of water that could be taken from each of the two sides of 
the Falls, Avhich is the question we have been brought back to, as I 
understand it, notwithstanding the debate of last July. 

I proceed now somewhat more directly to the consideratiou of the 
Canadian side. But before I do that I have a few compliments to 
pay to Mr. McP'arland, in vicAv of the circulars that have been rained 
in on me for some time; and I wish at the outset to refer to my foot- 
note on the first page of my printed reply : 

In his excess of zeal in a cause which in its intention is highly mevitorious, 
Mr. McFarland has made attacks upon our cinnjijinies so unfounded as to com- 
pel me to dissect and to refute them. This necessarily siives to my remarks 
more of a personal turn than I desire, for I understand that Mr. ISIcFarland has 
been and is a useful public citizen. I have nothing to say in derogation of his 
character or his motives^ though in this discussion, like the cowboy in the west- 
ern mining camp, he does seem to be " unconnnon free with his gun." 

Mr. McFarland made a point last summer of referring to the 
American Commissioners as " the very able governmental Commission 
which has looked into the physical details of this question." He now 
refers to them as "the corporation-favoring International Waterways 
Commission." I do not know when they underwent that change of 
heart or character which called for that different designation. Mr. 
McFarland has contested and challenged the contents of their report, 
and has '' gone to the country," his constituents. While this bill is the 
product of the Congress of the United States, who ordinarily are sup- 
posed to be the representatives of the people, Mr. McFarland in July 
stated that he was "the lone representative of the people," and he now 
has gone back to the people to get their official expression upon you. 
Well, his appeals have been most extraordinary. He has called for 
a flood of personal letters. He has called for a Niagara flood of let- 
ters, and in the third emergency call he asks for a still greater flood, 
so that if his call were to be literally complied wdth, as perhaps it has, 



TEANSMTSSION OF POWER FROM THE NIAGARA RIVER. 73 

it would convert the War Department into a bureau of rivers and 
harbors. 

As I have said before, if his statements were justified in my opinion 
I would be with him entirely. 

There are certain of his statements that bear so directly upon the 
company I rej^resent, and which illustrates the state of mind of Mr. 
McFarland, who acts as the representative of this attack, that I must 
reply to at least some of them. 

The first statement he makes that attracts my attention is, that the 
Canadians already have cut off 500 feet of the Horseshoe Falls " to 
accommodate a power company/' and again "to give a better chance 
to one of the power companies." 

That statement is absolutely, unqualifiedly, and unnecessarily un- 
true. Mr. McFarland has been advised of its untruth, and he was 
advised of its untruth on July 12 last, by Mr. Douglass, who sits 
there, the mayor of Niagara Falls, in the presence of Mr. P. P. 
Barton, who sits there. Mr. Douglass, within thirty minutes after- 
wards repeated the truth to yourself there at Niagara Falls, which 
I have the documents to substantiate. 

There have not been 500 feet cut off from the Horseshoe Falls. The 
facts are these : 

After the fall of Table Rock, and the consequent erosion of the con- 
ca^dty of the Horseshoe Falls, the current sought and deepened the 
central channel, exposing the higher margin of the Canadian shore. 
To reclaim this exposed margin was the continuous pur]Dose of the 
Canadian commissioners from their appointment in 1887, prior to 
any power development. In pursuance of this purpose they have 
caused to be reclaimed an area which, measured along the crest line 
of the Horseshoe Falls, extends 400 feet, but at right angles to the 
original shore line only 175 feet, and this reclamation they deem to be 
for the public benefit. Of the 400 feet reclaimed, 150 feet have been 
reclaimed prior to 1805 ; that is, before any work had been begun 
there, and this 250 feet has been reclaimed since. 

These facts appear, if you care to have them, in the reports of the 
Queen Victoria Niagara Falls Park commissioners. It is stated in the 
seventeenth report, at i^age 45 and page 8. In addition to that I have 
this expressive letter, written last week to our company by the head of 
the commission. It is found on page 4 of my brief. 

Queen Victouia Niagara Falls Park Commissioners, 

Toronto. Xovenibcr 20, 1906. 
Canadian Niagara Power Company, 

'Niagara Falls, Ontario. 

Dear Sirs : Keferriuu: to the following stiitement contaiiied in the i)ainphlet 
entitled " Imminent danger to Niagara Falls," viz, " They have already cut off 
500 feet of it (Horseshoe Falls) to accommodate a power company!" I have 
only to state that the instruction to your company to deposit the waste material 
from tunnels, and so forth, on the margin of the river was for the imrpose of 
improving the scenic conditions of the river shore. Owing to the continued fall- 
ing away of enormous masses of rock at what might be called the apex of the 
Horseshoe Falls, drawing the water from the shore line into tlH> center of the 
river, the river on tlie Canadian shore had become dry, exi)osing large areas of 
unsightly bowlders and ragged rocks. 

The commissioners, therefore, thought it well to take advantage of the work 
of excavation. A\hich was then in jn-ogress, in order to remedy these unsightly 
conditions brought about by the water receding from the shore line. 



74 TRANSMISSIOISr OF POWER FROM THE NIAGARA RIVER. 

So far from the comiuisf^ioners being under the dictation of your company, 
or any other ])o\ver company, in this particuhir, they acted according to their 
best judgment, and they believe they have succeeded in enhancing the jesthetic 
conditions of the Horseshoe Falls, as well as of the shore line approaches 
thereto. 

Believe me, yours, truly, J. W. Langmuik, Ghairman. 

AVliat can be thought of the responsible thought of a gentleman 
Avho, being v^arned and told the facts just as they develop under this 
letter, should undertake to go to his constituents, the great American 
people, with the twice-repeated statement that this was done by us 
for our purposes? 

Mr. McFarland has made a series of statements about the water 
likely to be withdrawn. Your honor has very forcibly animadverted 
upon that j^roposition by statements from your engineers, to which 
Mr. McFarland addressed some extraordinary criticism, as it seemed 
to me, when he questioned the right of the Secretary of War to refer 
the matter to his own advisers, the engineers, for information not 
within his personal knowledge. 

As to the amount of water likely to be withdrawn, Mr. McFarland 
is not only not consistent Avith the truth, but not consistent with 
himself. He says: "A recent examination of the tailraces and chan- 
nels intended to turn the water into the Niagara River after it has 
been used in the great turbine wheels of the existing Canadian plants 
shows that their aggregate section is G8 by 72 feet." 

There we have his own statement as to what water can be carried 
out. It is altogether too large as you will presently see. But that 
is his owm statement, and I want you to hold that for comparison wdth 
some of his subsequent statements. " The velocity of water noAV be- 
ginning to rush through these vast channels is at least five times that 
of a rapidly flowing river. Is it likely the volume of water which 
will pass at Niagara speed through a channel as wide as a city boule- 
vard and as deep as a six-story office building will not make any 
difference in the volume of the Falls?'' 

It may be that in the city of Harrisburg a boulevard is not over T2 
feet wide, but they are wider in other cities, including Paris. 

The aggregate section of 68 by 72 feet given by Mr. McFarland 
would be a prism of 4,896 square feet, and which is about three times 
the aggregate of the actual cross section of the tailraces of the three 
Canadian developments, whose measurements are as follows : 

Square feet. 

Canadian Niagara PoAver Company tunnel, cross section 405 

Electrical Development Company, cross section, approximately 514 

Ontario Power Con)pany, tailrace, approximately 720 

Total 1, 639 

for the ultimate development of 180,000 horsepower. Their method 
of using the water being somewhat different from ours, we have to 
estimate that, but I think. General Greene, that is fully as large as the 
discharge you have there. 

General Greene. I did not hear the first part of that. 

Mr. Stetson. That 720 feet I think is fully as large as your cross 
section. Your method of using the water is not the same as ours, and 
therefore it could not be computed as mine can, but I think 720 feet 
is fully as large as the cross section of your discharge. 

General Greene. 720 square feet ? 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 75 

Mr. Stetson. Yes. 

General Greene. Yes. 

Mr. Stetson. I think it is fully as large — those aggregate 1,639 
feet. Mr. McFarland has it — I don't know where he got it — that 
the aggregate section is 08 by 72 feet. That would be 4,89G feet. He 
has made the statement there that the aggregate section is three times 
as large as any Ave can figure out from an aggregation of the three 
developments. 

Mr. McFarland further states: "Another computation shows that 
the water it is proposed to abstract on the Canadian side alone would 
make a rapidly flowing river 1,685 feet wide and 18 feet deep." And 
in another place — " a rapidly running river nearly half a mile wide 
and 18 feet deep." 

The engineers of the Niagara Falls Power Company advise me 
that this statement is even more wide of the truth than those already 
dissipated. 

The amount of water on both sides, which under the temporary 
permits of the Secretary, and the report of Captain Kutz, it is pro- 
posed now to abstract, would be 26,100 feet per second. I give the 
calculation at the bottom of page 6 of my brief. This volume of 
water, flowing out of a river 18 feet deep and 1,685 feet wide would 
make a .'' rapidly flowing river" only if this term, borrowed from 
Mr. McFarland, could be applied to a stream running at the rate of 
less than half a mile an hour, which may be compared with the water 
in the Schoelkopf Canal that runs about 5 feet per second, or, approx- 
imately, 4 miles an hour. 

Mr. McFarland endeavors to heighten the peril bv stating that 
" The volume of water thus withdrawn will more than equal the 
present average outflow at the mouth of the Hudson, Delaware, and 
James rivers combined." 

. But these are tidal rivers, and the outflow at their mouths is incon- 
stant and is not susceptible of comparison with the current of Niag- 
ara, which at all times is a rapidly flowing stream. It is possible 
that because of the slowness of current all of these three tidal rivers 
in their entire volume at their mouths would be inadequate to the 
regular production of 350,000 horsepower; but we repeat, in the 
present case, terms of horsepower are not suitable terms for compari- 
son. As already observed, Mr. McFarland himself has stated the 
aggregate section of the water which he charges is to be withdrawn, 
viz. : a prism of 68 by 72 feet, this being three times the prism actu- 
ally contemplated. But take this prism, 68 by 72 feet, and how 
would that compare with the combined outflow at the mouth of all 
of these great rivers? 

Mr. McFarland scoffs at the contention that the withdraw^al of the 
amount reported by your advisers will have no appreciable effect 
upon the scenic grandeur of Niagara Falls, and cites, " The sober 
finding of the American members of the International Waterways 
Commission, that *■ the glory of Niagara Falls lies in its volume of 
water rather than in its height or in the surrounding scenery.' " 

But, as stated by Mr. McFarland in his circular of November 5, 
this " is the very same body that has recommended to Secretary Taft 
to permit the admission of 160,000 electrical horsepower from the 
Canadian side." Why should the capacity or the fairness of this 
body now be questioned? 



76 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Mr. McFarland flouts the engineers who insist that no damage will 
be done to the Falls, " those who bring the oldest inhabitant of Niag- 
ara to testify that he can not see any difference." He prefers to rely 
upon '• Recent visitors to the Falls," who "' insist that there is already 
evident a substantial reduction in their glory." 

The suggestion of Mr. McFarland as to a present apparent de- 
pletion of Niagara, must have been refuted by the personal observa- 
tion of the Secretary upon the day of the hearing at Niagara, July 
12, 1906, when the works upon the American side were in full opera- 
tion. I am not the " oldest inhabitant," but after nearly twenty 
years of continuous observation of the volume and flow at Niagara 
Falls, I am prepared to maintain, and I challenge successful denial 
of the proposition, that upon that day there was no diminution of the 
volume or flow of the Niagara River Avhich was susceptible of obser- 
vation. Neither is there now any appreciable diminution. 

This accords with the view of Mr. C. K. D. Burton, whose highly 
intelligent and able plea for Niagara's preservation in Leslie's Weekly 
for November 8, though not wholly free from error, is commendable 
for its purpose to treat the subject fairly. Mr. Burton, in sub- 
stance, concedes that " the Falls have not suffered perceptibly as yet," 
and states that " measurements show that the present diversions have 
lowered the water at the brink a few inches," though he thinks that 
possible future diversions to the full extent authorized " may well 
be subject for apprehension." 

I commend that article to anyone who wishes to see that subject 
stated fairly, next after the statement of Professor Clarke. 

This is in accordance also with the testimony of the water gauges, 
which at least three times a day for more than fifteen years have 
been maintained and examined by the Niagara Falls Power Com- 
pany and by the Schoelkopf Company. We find no substantial 
diminution from those gauges, and neither do the Schoelkopf people. 

These observations show^ not only that there has been no observable 
depletion of the American Falls, but that there has been no material 
diminution, even when tested by water gauges. 

Then I want to call your honor's attention to this aspect of the 
matter. The fact is that the draft upon the American side has 
resulted in the reestablishment of the regimen of the river by con- 
tribution from the Canadian side, where the water is deeper. 

I do not mean that we draw the water back from below Goat 
Island, but diagonally across the river from above Goat Island. 

It has been suggested by some, though doubted by others, that the 
additional w^aterways furnished by the tunnels tend to increase the 
rapidity of the flow in the river itself, and thus to draw more rapidly 
upon the ample reservoirs of Lake Erie. In its effect upon this 
reserve the largest proposed diversion would be insignificant. 

That was the view of Professor Williams, but was not accepted by 
General Ernst nor Mr. Brackenridge. That was the subject of dis- 
cussion, and I have referred in my brief to the page of the proceed- 
ings wdiere the testimony can be found. 

Mr. McFarland permits himself to indulge in the following in- 
sinuation, which is unworthy, and in its necessary implication is 
absolutely false. He says : " It is reported that they are ready to 
deceive the authorities, for one of their engineers unwittingly dis- 
closed the fact last July that preparations had been made to bring 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 77 

in 40,000 horsej^ower, and to expend it or waste it tlirongh rheostat, 
in order that they might chiim and show by instrument that they are 
actually transmitting that enormous amount of power." 

The reference here is to the Canadian Niagara Power Company, 
which I represent. I appeal to the personal experience of the Secre- 
tary of War, or his engineer, Captain Kutz, and of the American 
members of the International Waterways Commission, whether the 
conduct and bearing of the Canadian Niagara Power Company and 
its officers have not been such as absolutely to refute the suggestion 
that it has been " ready to deceive the authorities," even though it was 
silly enough to wish to do so. All of its works and records have been 
thrown open fully and cheerfully to all of the authorities. It would 
have been futile, as it would have been base, for the company to make 
any false pretense that it was otherwise disposing of an amount of 
power that it was carrying only to waste in a water rheostat. Any 
such false pretense could not have survived inspection for five 
minutes. 

However, it is true, and it was perfectly legitimate, that upon the 
introduction of the Burton bill it was considered whether, in order 
to demonstrate the actual producing and carrying capacity of its 
Canadian works and conduit as actually installed and not to deceive, 
this company shoidd not carry to the- American side not 40,000 horse- 
power, but 10,000 horsepower, in addition to the 16,000 stated by me 
at the July hearing. 

AA^ien, Mr. Secretary, you asked me at the July hearing how much 
we were carrying to the American side, I answered 16,000. I did 
not say 32,000 horsepower or 40,000 horsepower. That was the first 
time the question was raised. The condition was necessarily obvious 
to the authorities, and how could we attempt to deceive the authori- 
ties? The project of transmitting 32,000 horsepower was considered, 
although, because of delays in the completion of our new transmission 
line (now in operation), we were not then prepared usefully to em- 
ploy the power. This being so, the actual capacity of the generators 
and conduits as then installed could have been demonstrated practi- 
cally only by carrying the power into a water rheostat, for no other 
disposition would then have been practicable. There was no secrecy 
about this proceeding, and the prominent location of the buildings 
would make any such preparations a matter of common knowledge as 
well as the obvious intent. The facts were always accessible to every- 
one, including Mr. McFarland, and there would have been no necessity 
for misstatement either by the company or Mr. McFarland, either as 
to figures or as to motives. But the idea never advanced beyond 
preparation. It is not strange that the distortion of such a perfectly 
proper proceeding should be introduced by the words, "It is reported 
that." 

Mr. McFarland states that at the hearing at Niagara Falls on July 
12 all of the Canadian power companies " agreed on one point, which 
was that the American public was very foolish in interfering with 
their beneficient desires to produce power at its expense." 

I appeal to the record, as well as to the memory of the Secretary, 
for the refutation of this statement, certainly so far as I am con- 
cerned. 

Upon that occasion I began my remarks by stating that I believed, 
and should give my reasons for believing, that the impairment of 



Y8 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Niagara would not be so serious as anticipated by Mr. McFarland, 
and that if it were to be as serious as anticipated by him, I should 
be with him entirely. (Record, p. 21.) 

And now I repeat, as firmly and comprehensively as I can, that 
I have nothing but respect for the sincere men and women who, by 
appeals sometimes as incendiary and erroneous as those of Mr. 
McFarland and sometimes more temperate, but not founded on in- 
vestigation, have been stirred to anxiety lest the greatest natural 
wonder of northeastern America is to be destroyed or impaired. 
This anxiety is praisewoi'thy, and did I believe the lieril were real, 
I should stand with those who feel and express this anxiety. If I 
believed that the pioneer companies I represent would have pro- 
duced any such result, I would cheerfully forego every penny of pos- 
sible profit rather than further the enterprise. But I do not so be- 
lieve, nor after their exhaustive investigations did Judge Burton or 
his committee so believe, for otherwise they would not have reported 
the bill which invests you with your discretionary powers up to the 
limit fixed by the law under which we are now proceeding. 

The question is not as suggested by Mr. ISIcFarland, one as to the 
folly of the American ])eople, but is one of fact — "" Will or will not, 
the Falls of Niagara be affected appreciably by the diversion or the 
transmission of the waters to the extent recommended by the Ameri- 
can members of the International Waterways Commission ? " This is 
the question Avhich to the extent of 350,000 horsepower from the 
Canadian Falls Congress decided to leave open for determination by 
you, and it is the question upon which you have chosen to take capable 
and professional advice from your captain of engineers and the 
American Commissioners. It is the question also concerning which 
the advice of these Commissioners as to the aggregate quantities that 
may be withdrawn is the basis of our appearance before you to-day. 

It is an insult not only to the companies whose position he belies, 
but also to yourself, that Mr. McFarland should have issued the mis- 
statements of which he has been guilty. He has advised the American 
people that " Resolutions and petitions have little force, but a flood 
of personal letters will be effective. This flood should begin to drop 
in upon Secretary Taft at once and continue until November 15." 

A '" flood of personal letters," induced by such a cloud-compelling 
appeal can have little weight with the Secretary, not even though the 
flood were to equal '"' the combined outflow at their mouths of the 
Susquehanna, Potomac, Hudson, Delaware, and James rivers." This 
is a case in which apparently Mr. McFarland has proceeded upon the 
second line of the Lincolnian canon, that you " may fool all of the 
people some of the time." 

Disregarding the statutory regulations of the Niagara Falls Power 
Company, which at its own suggestion limited its right to 200,000 
horsepower — 

And here, I wish to make a diversion for a minute. In 1891, when 
Mr. Andrew^ H. Green discovered that the water was falling three 
years in advance of our tunnel, I saAV that we were likely to encounter 
agitation such as this that is coming now, founded upon a misunder- 
standing of the situation, which might imperil our rights. I did not 
intend to have our rights rest solely upon the legislative ground. I 
said " We will have a contract." 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 79 

So I drafted a contract with the State of New York, which Avas 
the owner of that proj^erty, that we wonld furnish power free to the 
State for the use of its commission, for the use of its reservation, 
and that we should therefor have the right to take 200,000 horsepower. 
Up to that time we had two charters. We had the charter of the 
Lewiston company, which we had allowed to lapse, and we had our 
own charter, without limit, and to meet that question I wrote there 
the express limitation of 200,000 horsej^ower before the other com- 
pany put it in in 1896, and there was the reason of that limitation. 
The foundation was suggested by us and was not imposed upon us. 
We already had an unlimited right, as has since been decided in 
respect to another charter by the courts of our State. 

Mr. McFarland states that the power-developing companies were 
perfectly satisfied to have all the water they wanted for nothing 
from the State of New York, and this in the face also of the fact 
that, as has been decided by the courts, the power companies upon 
the American side, being the riparian owners, received from the 
State of New York nothing to which they were not entitled by virtue 
of their riparian rights. Neither the State of New York nor the 
United States were the owners of the running waters as against the 
riparian owners. 

Finally — and I will be glad to reach the close of this personal side 
of it — Mr. McFarland states that, " Not content with getting free 
water from the United States to produce profit-bearing water power, 
the Niagara Falls power companies have introduced considerable 
Avater into their stock, it is said, which is free to those inside, but 
expensiA^e to the public." 

I have indicated wln^ he is in error in saying that we get free Avater 
from the State. 

This statement can refer to only tAvo companies, the Schoelkopf 
Companj^, Avhich has a stock of only $100,000, of which no part has 
eA'er been sold to the public 

Secretary Taft. Has that been increased? 

Mr. Stetson. No; the capital stock is $500,000, and not $100,000. 
I would like to haA^e that correction made. It is all oAvned by the 
original group and has not been sold. His charge can refer only to 
the Schoelkopf Company and to the Niagara Falls PoAver Company, 
which has a capital stock of about $4,000,000, Avhich has never been 
sold above 80 cents on the dollar, and Avhich in the sixteenth year of 
its issue sells for only 50 cents on the dollar, oAving to this kind of 
agitation, although in the opinion of the company it represents an 
investment fully equal to the par amount of the stock. 

INIr. McFarland refers to the greed of these companies. The extent 
of that greed may be indicated by the fact stated by me at the 
July hearing, that for fifteen years the Niagara Falls Power Company 
has been contented to continue Avith a cash iuA^estment of OA^er 
$20,000,000, receiving only ordinary interest upon the cash invest- 
ment represented by its bonds, and Avithout a dollar of diAndend upon 
its stock, in AA'hich alone could be found any opportunity for real 
profit. A corporation Avhose activities and energies are directed to 
and satisfied by the return of ordinary interest can not justly be 
accused of greed. 

I understand that some comment has been made upon the state- 
ment that no dividends had been received as being a statement that 



80 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

means nothing. It means eveiy thing. It means that we have re- 
ceived only ordinary interest, and that always the profit has had to 
go back into the property, and there it stands to-day, with the stock 
selling at 50 cents on the dollar. I say that, so far as the Niagara 
Falls Power Company is concerned, it was not started with the main 
purpose of commercial profit. There was never a promise of large, 
commercial profit. Men were attracted, and perhaps deluded, with 
the idea of the useful service that they were rendering to mankind 
by producing electrical power in this novel way, of which we were 
the pioneers for the whole world. 

Mr. McFarland refers to a newspaper publication of a plan of 
merger of the four power companies of Niagara Falls, so as to 
create a monopoly, and asks : " Should the United States protect 
this potential monopoly ? " 

All four companies are represented in this room, and I defy one of 
them, I appeal to any one of them, to indicate whether there is any 
thought of a combination or monopoly. We are all fighting each 
other as fiercely as Mr. JNIcFarland is fighting all of us. There is no 
thought of combination that I know of. I will have something fur- 
ther to say about that in another branch, about the international 
treaty. 

The suggestion of an intended monopoly is absolutely untrue in 
fact. Neither the Niagara Falls Power Company nor its subsidiary, 
the Canadian Niagara Company, has now any intention of entering 
into a combination with any company, and against any monopol}^, 
though intended sufficient protection would be afforded by the pro- 
visions of each of their charters. 

In the Canadian charters is a most absolute provision against any 
sort of combination except with the consent of the commissioners. 
We would have to get the commissioners to give their consent ; and 
in the charter of the Niagara Falls Power Company is written the 
words by me in 1889, that this shall not authorize or permit a monop- 
oly. So I do not now see hoAV the thing could be done. Mr. McFar- 
land will, perhaps, give us the information. 

Mr. McFarland indiscriminately assails all of the power com- 
panies, irrespective of the fact upon which I dwelt at the July hear- 
ing, that the two pioneer companies, the Niagara Falls Power Com- 
pany and the Schoelkopf Company, were absolutelv immune against 
any charge that their operations would or could appreciabl}^ diminish 
the volume of Niagara Falls. This fact was the subjct of exam- 
ination and final report by the committee of the New York consti- 
tutional convention of 1894, the report, upon page 11, stating: " Two 
of them [that is, the Niagara Falls Power Company' and the Schoel- 
kopf Company] have expended large sums of money, and are now 
operating their respective plants, and the amount of water which 
they take will not do any appreciable injury to the falls." 

That was before anyone else had come on. 

At the July hearing, in answer to my question as to his view of 
the effect of the diversion by the Niagara Falls Power Company, 
General Ernst replied : " If you were the only persons concerned you 
would probably never have heard all this agitation." 

Upon this impressive recognition of our innocence of the charge of 
injurious assault upon Niagara Falls I am content to rest. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 81 

The next heading in m}^ brief, in fact the next two headings, 
have a very important bearing upon these further charges and state- 
ments, and as supplementing Mr. Ely's admirable remarks in respect 
of the effect upon western New York and its maniifactures. Mr. 
McFarland has undertaken to say that the prices of power here are 
not reduced through our operations. How absolutely fallacious this 
this statement is will appear in a moment, as I pass on. 

The Niagara Falls Power ComjDany, this pioneer in the develop- 
ment and establishment of great electrical central power houses and 
lines of transmission, has conferred an inestimable benefit on man- 
kind, and in an esj^ecial degree upon the Niagara frontier, to which 
it is now delivering more than 100,000 horsepower, 

I ask you, Mr. Secretarj^, kindly to remember that we are delivering 
more than 100,000 horsei^ower to-day ; for all the power you gave us 
permission to bring from Canada has been availed of, and we stand 
with customers waiting at our door. We have an application from 
one company for 25,000 horsepower, and that is awaiting the result 
of this hearing. If the permission can not be given, we can not 
supply it, on the American side at least. 

As I say, this company is now delivering more than 100,000 horse- 
power at prices which, though misrepresented and ridiculed by Mr. 
McFarland, are readily accepted by hundreds of users, and this with- 
out com^^ulsion. 

Nobody is obliged to use our power. All of the takers could have 
continued to use steam engines. Wliy should they use our power to 
the extent they are using it — ^100,000 ? Why do none of them give it 



up 



Allien this charge was made a most remarkable statement resulted. 
Every user of Niagara power in the city of Buffalo — not one, not two, 
but everyone — wrote us a letter, and those letters were published, 
covering two pages of the Buffalo papers,- two full pages, showing 
their satisfaction with our service. We have no trouble with our 
customers. 

Let us see what these prices are. The Niagara Falls Power Com- 
pany has published its schedule for standard ten-hour meter power 
at a rate which offers a maximum use of 100 horsejDOwer and an 
average use of 75 horsepower for a month of 250 hours, at an aggre- 
gate price of $144.17. This compares with the following reported 
charges in six important northern cities: 

Boston .$937. 50 

Philadelphia 839. 25 

New York 699. 37 

Chicago 629. 43 

Clevelaud 559. 50 

Rocliester 419. 62 

Niagara Falls 114. 17 

In the face of such figures, who can doubt the beneficent effect of 
the operations of the Niagara Falls Power Company, furnishing 
power at not more than one-fourth of the cost in New York, Chicago, 
or Cleveland, and at less than one-fifth of the cost in either Boston or 
Philadelphia ? 

Mr. McFarland's statement as to the cost of the public lighting in 
Buffalo, misleading as it is, has nothing to do with the case. Neither 
the Niagara Falls Power Company nor its ally, the Cataract Power 
18447—06 6 



82 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

and Conduit Company, has any relation to or control over the public 
lighting in Buffalo. They merely sell and deliver electric current to 
the lighting company the same as to any other customer over whom 
they have no more control than the paper seller has over the imagina- 
tion which Mr. McFarland indiscriminately impresses upon his vol- 
uminous printed output. 

In great numbers, our customers have come to Niagara Falls, which 
at the beginning of our work was a country village with compara- 
tivel}^ few industries, until now it has become a prosperous city, the 
ninth in the State in the volume of industrial products, apj^roaching 
$20,000,000 per annum. Let me call your attention to the figures at 
the bottom of page 1-1 of my brief. Bulletin 57 of the Census of 
Manufactures for 1905 shows the following increases in the value of 
manufactured output from 1900 to 1905 : 

Buffalo from $12('). 150. 839 to $172, 11."). 101 

Niagara Falls from 8, .540. 184 to 1(5, 01.5. 78(i 

Loekport from .5. 3.52. ()(;0 to .5,807.008 

Rocliestor from 5i), CIW, !t(>0 to 82,747,370 

Syracuse from 2(>, .54(;, 207 to .34,823.751 

The value of the output of Niagara Falls was almost entirely 
doubled, and Lockport, right alongside, had an increase of only 
$500,000, and it was the larger place before we started these works. 

All this without apparent diminution in the apparent volume of 
Niagara River, and with a steady increase in the number of visitors, 
not only to the Falls, but to our power houses as well. The moderate 
admission fees charged to such visitors are used for the benefit of 
employees. 

In the year 1899 our continuing achievement was well described 
by Theodore Roosevelt, then governor of New York, who completed 
his inspection of our works by writing over his subscription in our 
visitors' book, "A marvel indeed.'" 

How great is the marvel, and how splendid the achievement, has 
been eloquentl}^ expounded by that inspired seer of both present and 
future, Mr. H. G. Wells, in the following wonderful words, written 
without previous knowledge of or inspiration from our companies, 
and published in the Harper's Weekly of July 21, 190C : 

The dynamos and turbines of the Niagara Falls Power Company, for example, 
impressed me far more profoundly than the Cave of the Winds — are, indeed, 
to my mind, greater and more beautiful than that accidental eddying of air 
beside a downi)Our. They are will made visible, thought translated into easy 
and connnanding things. They are clean, noiseless, and starkly powerful. All 
the clatter and tuniidt of the early age of machinery is past and gone here ; 
there is no smoke, no coal grit, no dirt at all. The wheel iiit into which one 
descends has an almost cloistered quiet about its softly luunming turbines. 
These are altogether noble masses of machinery ; huge, black, lumbering mon- 
sters ; great, sleeping toi)s that engender irresistible forces in their sleep. They 
spr;uig. armed like Minerva, from serene and specidative, foreseeing and 
endeavoring brains. First was the word and then these powers. A man goes 
to and fro quietly in the long clean hall of the dynamos. There is no clangor, 
no racket. Yet the outer rim of the big generators is spinning at the pace of 
100,000 miles an hour; the dazzling clean switchboard, with its little handles 
and levers, is the seat of empire over more power than the strength of a 
million disciplined, unquestioning men. All these great things are so silent, 
as wonderfully made as the heart in a human body, and stouter and stronger 
than that. * * * 

When I thought that these two huge wheel jiits of this company are them- 
selves but a little intimation of what can be done in this way. what will be 
done in this way. my imagination towered al)0ve me. I fell into a day dream 
of the coming j^ower of men and how that power may be used by them. * * * 



TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 83 

For surely the greatness of life is still to eoiiie ; it is not in such accidents 
as mountains or the sea. I have seen the sjilendor of the mountains, sunrise 
and sunset amont: them, and the waste innuensity of sky and sea. I am not 
blind, because I can see beyond these glories. To me no other thing is credible 
than that all the natural beauty in the world is only so much material for the 
imagination and the nund. so man.y hints and suggestions for art and creation. 
Whatever is is but the lure and symbol toward what can be willed and done. 
Man lives to makt^— in the end he nmst make, for there will be nothing left for 
him to do. 

And the world he will make after a thousand years or so. 

I, at least, can forgive the loss of all the accidental, unmeaning beauty that 
is going for the sake of the beauty of tine order and intention that will come. 
I believe — passionatel.v. as a doting lover believes in his mistress — in the 
future of mankind. And so to me it seems altogether well that all the froth 
and hurry of Niagara at last — all of it — dying into hungry canals of intake, 
should rise again in light and power, in ordered and equipped and proved and 
beautiful humauit.v. in cities and palaces, and the emancipated souls and hearts 
of men. * * * 

We readily accej^t the characteristically fine statement of President 
Koosevelt that Niagara Falls should be preserved " in all their beauty 
and majesty,"' and we rest confidently on the proposition already 
announced by us, and elaborated at the July hearino-, that no use of 
Niagara waters accomplished or proposed by either or both of our 
two pioneer companies, who have spent hundreds of thousands of 
dollars to secure the most aj^propriate architectural effects, would 
diminish either the beauty or the majesty of Niagara, 

If there is to be any such injury, it will be because of the proceed- 
ings of later comers, wdiose plans originated and have developed sub- 
sequently to ours. For their actions, if injurious, our tAvo power com- 
panies should not sufi'er. Those later comers undoubtedly will be 
able to speak for themselves. They can not speak or act to the 
detriment of our prior rights and the innocuous character of our 
separate and indej^endent exercise of those prior rights. They have 
filed briefs apparently in attempted diminution of our rights, 
although we had not in any way attacked them. AYe are forced 
now to an assertion not only of our rights, but of our priority of 
right, even if necessary to the entire subordination and possible 
exclusion of any beneficial enjoyment by them. 

I shall pass over that branch of my argument until later, and now 
I come to my discussion of treaty rights, which you Avill find on page 
23. and that is in accord with what Mr. Ely has said. 

Mr. McFarland rests his two '' emergency " calls particularly upon 
the propositions, first, that Congressional legislation will prove in- 
effectual unless supplemented by an international treaty, and secondly, 
that '' confidential advices from the State Department at Washington 
indicate the improbability of success in negotiations with Canada 
for the treatv unless the United States shows a real desire to jireserve 
the Falls." 

I wish to observe that the confidential connnunications here stated 
to have been received from the State Department, and those which 
appear to have been acquiesced in by the AVar Department, have not 
been from or by power com])anies. I appeal to everybody who has 
any knowledge of the subject whether the poAver companies have not 
done all that they ha\'e done upon a public and open record. If there 
has been a honeyfugling attempt to deceive the authorities, it has not 
been by the power companies, or at least by those I rejjresent. 



84 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Thereupon Mr. McFarland proceeds to make the following state- 
ments : 

(fl) The United States is now in a position to eitlier save or ruin Niagara 
Falls. If we freely admit all the electricity the Canadian companies want to 
send in. we divert the water from the Falls as directly as if we had control of 
the Canadian frontier. If the United States denies admission to this power it 
will not be produced, and the glory of Niagara will continue. 

(6) Insist respectfully that he (Secretary Taft) refuse to admit any power 
from Canada not now being admitted, because in so refusing he will be pre- 
venting the depletion of Niagara. 

It is hardly conceivable that the author of these two sentences above 
quoted could have seriously considered their effect upon an effort 
to promote an international treaty, which must be written, if at all, 
with the free will of Canada. How could he, or those who think 
with him, possibly expect that the friends of Canada would concede 
a treaty to those who by indirection and through American author- 
ities are virtually proposing in this particular to accomplish the 
" control of the Canadian frontier ? " 

The fair disposition of the Canadian authorities is plainly shown in 
the unanimous conclusion of the members of the International Water- 
ways Commission, both of the United States and of Canada, as em- 
bbdied in the report of May 3, 1906, transmitted to Congress by 
President Roosevelt under the date of May T. 1906 (see pamphlet 
entitled " Preservation of Niagara Falls," House Eeport 18024, p. 
283). 

In this report the Commission stated that while it was not fully 
agreed as to the effect of the diversion from Niagara Falls, all were of 
opinion that more than 36,000 cubic feet per second on the Cana- 
dian side of the Niagara River or in the Niagara peninsula, and 18,500 
cubic feet per second on the American side of the river could not be 
developed without injury to Niagara Falls as a whole. Your honor 
may catch the meaning " in the Niagara peninsula " as referring to 
the waters that came from the AVelland Canal and not to the waters of 
the river. 

Accordingly, the International Commission confined its recom- 
mendation to these figures, conceding twice as much draft upon the 
Canadian side as on the American side, probably because of the greater 
depth of water at the Horseshoe Falls. But it was stated expressly 
by the Canadian members that their assent to these conclusions was 
given only upon the understanding that any treaty or arrangement 
for the preservation of Niagara Falls should be limited to the term 
of twenty-five years, and should also establish certain principles, 
including the right of each country to an equal share in the diversion 
of international waters whether navigable or nonnavigable. 

In the face of this reasonable declaration how could anyone imag- 
ine that an international treaty would be facilitated by the suggestion 
that by discriminating against Canadian diversion and importation 
the United States in this particular may virtually control the Cana- 
dian frontier? 

We should all concur in the imanimous conclusion of every member 
of the Waterways Commission, Canadian as well as American, that 
" it would be a sacrilege to destroy the scenic effect of Niagara 
Falls ; " but we must recognize also that while Niagara Falls is a 
wonder, " fair play is a jewel." Such an indirect attempt to control 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 85 

the Canadian output certainly would not lead to the Canadian belief 
that we were disposed to play fair. 

To a considerable extent the Canadian Niagara Company repre- 
sents Canadian capital, but to a still larger extent, American capital. 
Nevertheless, it is a Canadian company, entitled to the protection of 
its Canadian contract, and cheerfully recognizing and prepared to 
fulfill its Canadian obligations under that contract. As stated by 
me at the July hearing, it desires the opportunity to use in the 
United States all of its power not required to meet the Canadian 
demands upon that contract, to which demands, when received, it 
will make prompt and cheerful response. The counsel of the Elec- 
trical Development Company of Ontario have misapprehended my 
statement when they say that our " company is not desirous of enter- 
ing into any contract wnth the Province of Ontario." Of course the 
Canadian Niagara Company is desirous of remunerative business in 
Ontario, as well as elsewhere, and has submitted a most reasonable 
bid to the Ontario government. Here and now the Canadian Niag- 
ara Company rests its case here upon a consideration of its rights as 
a Canadian corporation, and not upon any pretense that, representing 
American capital, it has therefore any joarticular right of hearing 
which is not open equally to the Electrical Development Company of 
Ontario, representing especially Canadian and English capital. 

The three applications of the three Canadian companies for the 
right of transmission can not be, and will not be, decided by you upon 
a consideration of the nationality of the holders of the corporate 
securities. 

How essential is the right of transmission even in the view of the 
Electrical Development Company of Ontario is stated in the brief of 
that company at page S, where it points out that if the amount of 
power which can be sold by interested parties in Canada is to become 
a basis of division of power to be imported into the United States 
" each of the companies would doubtless willingly abandon all sales in 
Canada, so as to be permitted a larger entrv into the richer markets 
of the United States." 

This frank declaration of the Electrical Develo]:)ment Company- 
Canadian both in incor]3oration and in membership — serves to indi- 
cate not only its own slight appreciation of its home market, but 
also the sense of injustice that would be induced generally in Canada 
by unjust discrimination against the right of importation of Cana- 
dian power. 

Since writing the foregoing we have received Mr. McFarland's 
third emergency call, dated November 19, in which again he compli- 
cates the possibility of international arrangement by the folloAving 
extraordinary plea : 

Now there is another opportunity. Because Canada, while planninfr to pro- 
duce 415.000 horsepower in destroying Niagara, can herself use less than .50,000 
horsepower, her power companies propose to sell it in the United States. Here is 
our opportunity. The Secretary of War controls absolutely the admission of this 
power. If he shuts it out, the water which would otherwise he harnessed for 
the power comi)anies will thunder its way unfettered over the ijreat cataract. 

Inclosed are some Niagara preservation post-cards. Get each one quickly into 
the hands of a man or woman who cares a single cent for Niagara and let Secre- 
tary Taft thus see what the country thinks of the claims of the power compa- 
nies. Ask him to admit no Niagara electrical power from Canada, 



86 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

If this plea for the total exclusion of Canadian power were to pre- 
vail, the following results would happen : 

The conq^anies which have invested large sums of money in the 
establishment of their works would find their investments unprofit- 
able, except to the extent that they could find consumers of power in 
Canada. Can anyone be fatuous enough to su]Dpose that thereupon 
the companies would not seek to protect their Canadian investments 
by Canadian development, welcomed and assisted by the Canadian 
authorities? Such establishment and development in Canada of 
course would involve such concessions in the cost of Canadian power 
as would atford sufficient inducement to Canadian users. But with 
sufficient concessions the cost of Canadian power could be brought 
so low that no railroad in the Province of Ontario could aiford to 
forego the use of electricity from Niagara. Such operation would 
supply a market for Canadian power vastly in excess of any figures 
yet suggested. 

If we are forced to it, we can go to the railroads. I know what 
Ave can do now, and the amount of power we are talking about can 
be taken on the other side without reference to an international 
Treaty, for under those conditions none would be made. 

The Canadian Niagara Compan^^ already has its line to Fort Erie, 
o]>posite Butfalo, and already contemplates considerable development 
in that vicinity and elsewhere, which ultimately may make it indift'er- 
ent whether or not Canadian power shall then be transmissible into 
the United States. 

Thus, in the end, the volume of water taken from the Niagara 
River would be not less than the amount which would have been 
taken had the Canadian power been admitted into the United States; 
while the United States, and in particular the State of New York, 
would lose through the establishment in Canada of industries which 
otherwise would have been established in the United States. 

Speaking for myself alone, and not for anyone else, I do not hesi- 
tate to express the belief that the Niagara Falls Power Company, 
having a New York charter right for a second tunnel in the city of 
Niagara Falls, could view with comparative equanimity a positive 
])rohibition of the admission of any power from the Canadian side. 
Nothing could tend more directly or more eifectiA'ely to make a reality 
of the Niagara monopoly which Mr. McFarland has regarded as 
potential (first emergency call, section 9). 

The revealed purpose to coerce Canada into a treaty by laying an 
embargo upon power importation into the United States of course 
would affect Canadian development. (See Captain Kutz, p. 14, 
sec. 29.) 

Thus again we are led to doubt that the author of Mr. McFarland's 
emergency calls had formed an intelligent purj^ose as to the practica- 
bility of an international treaty limiting the Canadian rights. 

ITpon these considerations, as well as upon those presented last sum- 
mer, we ask the favorable action of the Secretary of War u])on the 
application and the supplemental apj^lication heretofore submitted 
by the Niagara Falls Power Company and the Canadian Niagara 
Company for a permit to transmit Niagara power from Canada into 
the United States, the exact form of the permit to be submitted after 
decision of the principle. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 87 

I Avill ask leave to-morrow, or whenever your honor wishes, to make 
a statement rehitive to the res])ective rights of the three companies. 

Secretary Taft. Is there anyone else who wishes to be heard? 

Mr. Greene. I should like the privilege of speaking on the same 
questions Mr. Stetson has spoken on, and from a somewhat diiferent 
point of view. If I am permitted to go on this afternoon I will agree 
to limit mj'self to fifteen minutes by the watch; or, if you put me 
olf until to-morrow morning, I Avould like a little longer time. 

Secretary Taft. I will hear you now. 

STATEMENT OF GEN. FRANCIS X. GREENE, VICE-PRESIDENT OF THE 
ONTARIO roMER COMPANY OF NIAGARA FALLS. 

Mr. Greene. I regret veiy much to saj^ that our senior counsel, 
Mr. F. D. Locke, is quite ill. You heard him at Niagara Falls. He 
is quite unable to be present to-day, so the interests of the company 
with which I am identified will have to be looked after by a layman. 

After nearly five hours of speeches, many of them most illuminat- 
ing and interesting, I still think, sir, the question uppermost in your 
mind is. What is the real intent of this law; and, secondly, if the 
intent of the law is to maintain the status quo, what is the status 
quo? And it is on those two points only that I have anything to say. 

First, as to the intent of the law. This law had its origin nearly 
a year ago in the agitation started by Mr. McFarlancl and his friends, 
which led to a brief reference of the matter to the International 
Waterways Commission by yourself, to a reference to the matter in 
your annual report, to a brief reference, but a very pointed reference, 
to it in the President's message, and then to the introduction of the 
Burton bill, I think in the month of January. 

That bill, as originally introduced, absolutely and distinctly pro- 
hibited the transmission of power from Canada into the United 
States; and Mr. McFarland has stated, and he stated it again to-day, 
that that was what they contended for now and always — the absolute 
prohibition of the transmission of electricity at Niagara from Canada 
into the United States. 

After the Burton bill was introduced, the subject was referred to 
the International Waterways Commission, of which General Ernst 
Avas chairman of the American section, and after a long and pains- 
taking examination they made their report, I think, about the first of 
April. And after getting all the facts which they got, thej^ advised 
you and the Congress that the amount of water, or, as they put it, 
the limit of water, to be taken at Niagara beyond which you could 
not go Avithout danger of injuring the falls.' was 18,500 cubic feet 
on the American side and 30.000 cubic feet on the Canadian side. 
I will ask General Ernst to correct me if I am not right. 

General Ernst. That is right. 

Mr. Greene. That is what they recommended as the amount which 
could be taken without injury to the falls. 

General Ernst. No, no. 

Mr. Greene. The limit beyond which you could not go without 
injury to the Falls. 

General Ernst. Yes. 

Mr. Greene. There Avere hearings in Congress, of Avhich I have 
copies here, beginning on the 12th day of April and extending to the 



88 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

8th day of May. Mr. McFarlaiid and all his friends were there, 
always'contending that there shoukl be no electricity brought in from 
Candida. The hearing covered 200 pages, I think, and as the result 
of it all Congress passed the law in its present shape, allowing you to 
grant permits for the diversion of 15,000 cubic feet of water on the 
American side, and allowing the bringing in of 100,000 horsepower 
from Canada, thus putting the two sides on an equality; and that, I 
submit, is the intent of the law — that the Canadian companies have 
just as much right under this law to bring their power into the 
United States as Mr. Stetson has to take any water into his power 
house on the American side. 

I recite those historical facts, which I think no one will dispute, as 
to the way in which this bill was drawn, and as showing what the 
intent was. 

It was contended by Mr. Stevens, representing the chamber of 
commerce, this morning that you should issue permits, and by Judge 
Potter also, maintaining the status quo. "^Miat was the status quo at 
the time that bill was passed? I do not think I can explain it better 
than by the happy illustration you used this morning in regard to the 
house, that a man being permitted to build a house, when he gets the 
three stories built is permitted to put the roof on. 

The status quo when that bill passed was this. There were power 
companies on the Canadian side, built or nearly built, with a capacity 
of 100,000 horsepower, and with transmission lines on this side of the 
river for at least 90.000 that I know^ of. So that the status quo will be 
maintained by your granting permits from Canada for 100.000 horse- 
power, divided in such proportions as you see fit. 

I believe I am at the end of my time, sir. 

Mr. MoFarland. If I might be permitted in advance of the other 
presentation to close in ten minutes, I should be very glad to do it. 
It is almost impossible for me to be here to-morrow, and I under- 
stand Mr. Johnson desires to be heard upon this matter 

Mr. Johnson. Oh, no; I do not propose to address myself to any- 
thing except the division of power. 

Secretary Taft. Then you can go on. 

CLOSING STATEMENT OF J. HORACE m'fARLAND, PRESIDENT OF THE 
AMERICAN CIVIC ASSOCIATION. 

Mr. McFarland. I do not know whether there is any skin left on 
me. I feel as if most of it liad been removed by my genial friend 
with the smile on the other side of the room, for surely he has done 
what Mr. Roosevelt said he should do when we talked to him last fall. 
He said, " Gentlemen, turn on Niagara ! '' And if I have, turned 
loose on your unfortunate head a flood of Niagara feeling Mr. Stet- 
son has poured upon my devoted head a flood of Niagara objurgation. 
I pardon him for it, because he says he is interested in Niagara Falls 
to a greater extent than anyone else in the world, and I lioj^e he is. 
There is no earthly reason why I should not be satisfied that Mr. 
Stetson should say anything he chooses about me, if he reallv loves 
the falls. 

I feel somewhat unfortunate in this matter in having been the 
target of all this effusion, which really I am impelled to believe does 
not materially change the issue. I think General Greene has stated 



TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 89 

the issue, and I feel very much like coinciding; with most of his posi- 
tion, free from objurgation or of appeal to that which Mr. Stetson 
has well termed sentimentalism. 

It is a question of the construction of the law. and the immediate 
question now is as to the construction of that part of the law which 
relates to the admission of power from Canada. 

Mr. Ely in his address spoke practically for the Niagara frontier, 
and he urged its relation to this matter of admission of Canadian 
power as having a part in a great industrial development. There 
can be no doubt whatever as to the truth of that suggestion; but I 
submit to you, Mr. Secretary, that industrial development is a mere 
transfer of population, not always attended with a beneficent effect. 
For instance, Pittsburg, which is certainly one of the greatest in- 
dustrial centers in the world, sometimes really becomes an embargo 
on trade. Those of us who have to deal with the getting of manu- 
factured ]3roducts know what a serious thing it is. To carry to a 
logical conclusion the suggested commercial development would 
mean the creation, Avithin the commercial electrical transmission 
radius, of vast industrial congestion of a most unwholesome charac- 
ter. It would mean the shutting down of the steam engines and the 
shutting off of many small businesses, tending to unsettle conditions 
more than anything else. 

I also recur to the statement of Professor Clarke that there is power 
within electrical distance to do just this thing. These transmission 
lines need not be abandoned. This work can be done by water power 
if we are informed correctly by Professor Clarke. So that even the 
status quo will not be disturbed if you should, in your discretion, now 
decline this petition and refuse to admit the power from Canada. 

Mr. Ely has s])oken of the splendid achievement by New York of 
making the Niagara Park free. I submit to you that to proceed with 
this development as it has proceeded leaves the park free, but it cer- 
tainly injures the magnificent spectacle which the park is intended 
to ati'ord an opportunity to enjoy. Anyone who stands on the steel- 
arch bridge at Niagara and looks to the right, as you did on the 12th 
of May, will have no other feeling. 

There is a misconception of our position here. Not one word has 
been said in any of this literature, which Mr. Stetson, if he was 
standing in my place now, would call " hot air," suggesting confisca- 
tion. It has never been in our minds, and has never been uttered. 

Our contention is that under the intent and underlying purpose of 
this law, in carrying out that law, if you impose hardship upon 
invested capital, we believe you ought to suggest a remedy for that 
hardship. 

Secretary Taft. That might be on the American side, if there 
were an inhibition that could be enforced against the use of water 
going into a riparian owner's property, a right of indemnification; 
but it would be a little difficult to figure out; unless Congress were 
disposed to be very equitable, that there could be any claim to a 
right of damages against the United States Government for forbid- 
ding the importation of anything. 

Mr. McFarland. I should think so. 

Secretai-y Taft. And therefore the analogy of the appropriation 
or expropriation is hardly a correct one with reference to poAver gen- 
erated on the Canadian side. 



90 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Mr. Mc'Farlaxd. So far as it applies to production on the Canadian 
side; but it would apply to transmission lines erected on this side by 
American companies. 

Secretary Taft. Perhaps. Still that does not deprive them of the 
use of their property. 

Mr. McFarland.No. 

Secretary Taft. They are injured by reason of the fact that they 
are not permitted to import something; but I suppose the power of 
the Government to decline to allow importation does not ordinarily 
form the basis of a claim for damages against the Government. 

Mr. McFarland. I have not heard that it did. 

Secretary Taft. Therefore the analogy is not a close one. It re- 
mains still for consideration whether Congress did not have in mind 
the interference that property values by reason of such a radical 
change as the forbidding of the importation of electricity. 

Mr. McFarland. According to Mr. Stetson there would be no 
hardship to the Canadian companies, for they would at once proceed 
to develop their power market in Canada. 

Mr. Stetson. I said that Avould involve concessions. 

Mr. McFarland. Do you put it on the grovnid that they woidd 
have to make the price so low that the railroad company would use 
it instead of steam? 

Mr. Stetson. I think the Canadian government would take care 
of the price question in Canada. 

Mr. McFarland. Mr. Stetson has referred to the "" venomous '' at- 
tacks I have originated. I am sorry he has done that, for there has 
been no such feeling on my part. 

I take this opportunity to express my personal gratification at 
what I have seen of the fine development about the property of Mr. 
Stetson's company in Canada. Had I seen that before I made the 
address at Niagara Falls, I would have adverted to it pleasantly ; 
my statement would have been qualified by the better conditions. I 
take it that the development of power under the conditions which 
exist now at the works of the Niagara Falls Power Company is a 
most creditable development. I am glad that Mr. Stetson's company 
thought it worth while to spend so much money for what some might 
call unnecessary beauty. I sincerely wish the whole power develop- 
ment at Niagara was as sightly as that. 

Secretary Taft. Do you not agree that the Canadian companies 
have made their plans with a very much better view to artistic re- 
sults than has been the case on the American side? 

Mr. McFarland. Absolutely. I quite heartily agree with what 
you say. 

There is absolutely no use that I can see, Mr. Secretary, in taking 
any time in personalities. I would like to say, in my defense, how- 
ever, that the figures to which Mr. Stetson has adverted so feelingly, 
in respect to the sectioiis of tunnels of various powder companies, were 
taken from Captain Kutz's reports, and will be found, here, with one 
exception, that I estimated the outfall of the tunnel of the Ontario 
Powder Compan3^ I think that is the one which discharged its water 
just where it makes the power. If the figures from Captain Kutz's 
report are taken, and an equivalent area given to that one company, 
they will aggregate G8 by 72 feet, against which such exception has 
been taken this afternoon. 



TKANSMISSION OF POWER FROM THE NIAGARA RIVER, 91 

Mr. Stetson has alluded to the wa}^ Andrew H. Green touched 
upon this matter. Does he mean to insinuate that if that grand man, 
the very first man in the State of New York, I think, to introduce the 
sentimental belief that it was worth while to live in a beautiful 
world — does he insinuate that that grand man would be here in sup- 
port of his contention at this time? I think not. 

Mr. Stetson again insists that the development of 131,000 horse- 
power has made no difference whatever in Niagara Falls, and that a 
development of 350,000 horsepower on the Canadian side will again 
make no appreciable difference. If this water of Niagara was 
represented in dollars, and these abstractions for making power were 
checks upon it, I will guarantee that if it was Mr. Stetson's check 
that was being drawn he would not say it would make no difference, 
for it would be traversing common sense, and Mr. Stetson has uncom- 
mon sense. 

It seems to. me that the vital argument presented this morning, 
outside of my own poor effort to take up the matter in hand, came 
from Mr. Stevens, in his contention that if these permits are granted 
conditions are created which make intensely difficult, if not impossi- 
ble, the recovery of the falls, should it seem Avise later on to so 
attempt. That is, if we are preparing to skin Niagara Falls, we are 
doing it in such a way as to cause difficulty in trying to put the skin 
back again. Once this power is transmitted it is practically impos- 
sible to recover it. It is possible under the law, but the action of law 
would be so drastic as to make it difficult, and we could hardly expect 
a man of your sterling common sense to do it. You Avould rather 
refer it to the power that threw the necessity upon you. 

As to what Mr. Stetson has said as to the misrepresentations I 
have been accused of making in appeals to the public, I can answer 
that to the best of my belief I stated nothing but facts in the various 
connnunications I sent out, save where newspaper clippings came into 
nw possession, where I introduced them as newspaper clippings. It 
is certainly allowable, in appealing to the public, to use figures and 
comparisons. A cubic foot of water, or 100 cubic feet of water, or 
1.000 cubic feet of water, means nothing to the layman; but a com- 
parison with the volume of a river does mean something. That it 
does mean something you will agree, for you have led me into com- 
paring this water required with the estuaries of great rivers, rather 
than, as I intended, with the actual fresh-water flow, as I suppose I 
could correctly have stated it, and I am said to have made a misstate- 
ment when in fact I meant none and made none. The diversion is 
serious enough as it is. 

Secretary Taft. I suppose you would concede that the material 
question is the proportion to the total amount that the amount with- 
drawn forms, Avoulcl you not ? 

Mr. McFarland. t think I would not concede that, Mr. Secretary. 
I think that all of the testimony goes to show that the beauty and 
grandeur of Niagara Falls is in its volume, and that abstractions 
from that must necessarily decrease the grandeur and scenic value. 

Secretary Taft. You mean that the amount of the detraction from 
its scenic grandeur would not depend upon the proportion that is 
withdrawn ? * 

Mr. McFarland. Unquestionably it would. 



92 TRANSMISSION OF POWER PROM THE NIAGARA RIVER. 

Secretary Taft. And therefore that the effect would be less as the 
proportion was less ? 

Mr. McFarland. That, of course, I promptly admit. I could not 
do anything else. 

Secretary Taft. That being the case, do you hot think the fairest 
method to present is .the proportion which it is proposed to withdraw ? 

Mr, McFarland. It depends upon whom you are presenting it to. 

Secretary Taft. I agree that it does. 

Mr. McFarland. If I was presenting it to you in one argument, 
that is the only appeal I would make; but that appeal made to the 
public without comparisons would be without force and useless. 

I will pass by the objurgations Mr. Stetson has heaped upon me. 
I think many of them have answered themselves. He has not been 
free from misstatement at times himself, though I think uninten- 
tionally. He is a much better advocate than myself. 

The question now at issue is largely that of the admission from 
Canada. To-day nothing is to be decided as to the use of the water 
in the United States, and I think General Greene is right in stating 
that the limiting clauses of the Burton bill place the two nations upon 
an equal footing, the one important qualification being your own dis- 
cretion as to what will interfere with the majesty of Niagara Falls. 

General Greene did make a misstatement, which was probably 
unintentional, when he spoke of the introduction of the Burton bill. 
The bill was not introduced before the International Waterways 
Commission made its report, but after. That has a very important 
bearing on the application of the law. When the Waterways Com- 
mission made its report Mr. Burton at once drafted a bill enforcing 
all its recommendations, and it was not until some time afterwards 
that that was discarded and a new bill drafted, based upon the 
recommendations made by President Roosevelt to Mr. Burton him- 
self. But that bill reflects the condition of affairs that follows the 
report of the International Waterways Commission rather than the 
state of affairs that preceded it. 

With one more statement I wish to close the case of the people, 
whom it seems I have the most unfortunate privilege of representing 
to-day, and I heartily regret my position in this matter. The people 
do look to you for the preservation of Niagara Falls in so far as you 
can bring about that preservation within the strict construction of 
this act, and we ask you, in behalf of the peoj^le, to construe it strictly. 
These people, as you know, or would know if you had had the phys- 
ical possibility of consulting 10 per cent of the population, are not 
people who are moved by idle sentiment only. Mr. Stetson has given 
me great credit as a falsifier. Does he think I could stampede the 
governor of Pennsylvania by clamor ? Could I excite two bishops, at 
least, and many clergymen in his own great church into making 
unguarded statements by a mere clamor? Can I secure from men of 
undeniable judgment, of position, of wealth, and of corporate inter- 
ests, vast numbers of statements based upon idle clamor? It is 
unthinkable. These petitions and these letters which have descended 
here in a Niagara flood which Mr. Stetson resents, are not the idle 
outpourings of an unthinking people. 

They are words from thoughtful men and thoughtful women, rep- 
resenting the best of America, and I respectfully submit this has been 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 93 

a continuing feeling. It is the feeling which brought about the 
introduction and passage of the Burton bill, and it has continued. 
There has never been a week, a day, or an hour, but what some one has 
been thinking and talking upon the subject, and its recrudescence at 
this time is merely a renaissance of the condition that was presented 
at the time the bill was introduced. 

Secretary Taft. You have read the report of the committee ? 

Mr. McFarland. All of it; yes, sir. 

Secretary Taft. Do you not think the report indicates that the com- 
mittee thought I ought to grant licenses? 

Mr. McFarland. Frankly, I think the report indicated that the 
committee did intend for you to preserve the status quo at the time. 

Secretary Taft. They say : "A report has been filed by the joint 
commission on international waterways, including both the members 
from the United States and those from Canada, in which the prin- 
ciple of equality in the amount to be diverted on both sides by the 
United States and Canada is asserted. In the opinion of the commit- 
tee this rule should be followed. At the preseut time, however, the 
preparation for diversion has been greater on the Canadian side. 
It is expected, however, that ultimately the diversions on either side 
will be equal, and that the Secretary of War will keep this principle 
in view," 

I understood you this morning to think that I ought not to grant 
anything. 

Mr. McFarland. When you pressed me I said " Shut it all off." 

Secretary Taft. On both sides? 

Mr. McFarland. Yes. 

Secretary Taft. You object to the report of Captain Kutz. His 
report is that licenses be allowed to the extent of 150,000 horsepower. 
That would make the diversion on both sides about equal, w^ould it 
not? 

Mr. McFarland. I think so. 

Secretary Taft. How much do you think that would affect the 
falls? 

Mr. McFarland. I could not tell you. I want to say here that if 
I had SLTij idea this would be the end of it I should say let it come in, 
and let it stop at that. But do you think this will be the end of it ? 

Secretary Taft. I do, if I think it ought to be. 

Mr. McFarland. So far as the life of this act is concerned ? 

Secretary Taft. Yes; it is for three years. 

Mr. McFarland. And your filling of this office is not permanent? 

Secretary Taft. I hope not. 

Mr. McFarland. And when you go to the higher office to which we 
hope to call you you will not have direct jurisdiction upon this. 

Secretary Taft. But ought we to deny that which Congress intends, 
and which on the whole would be equitable, simply because we are 
afraid that there may be some abhorrent influence, to use Senator 
Conkling's expression, brought to bear to increase the amount? 

Mr. McFarland. They will not be abhorrent. They will be as 
gentle and as soothing as my friend Stetson. He says, and I believe 
it and agree with him, that the diversion has not ruined the falls; 
and he says the diversion of each of the other three companies, if it 
comes out, will not ruin the falls. I am not absolutely a fool, even 



94 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

if I am, as suggested by those opposed, a knave. The water of 
Niagara River is one, and it does not separate for these various 
interests. The Niagara River must be considered as an aggregate. 

I believe that is all I have to say. 

Secretary Taft. To-morrow we will assume, gentlemen, for pur- 
poses of discussion, that licenses are to be granted, and will hear dis- 
cussion as to what proportion each company ought to have — that is, 
we will take the matter up on the basis of Captain Kutz's report, and 
then discuss that. We will use that as a basis of discussion, and I 
hope to-morrow we can finish. I should be glad if we could finish it 
in one session. 

An adjournment (at 5.30 o'clock p. m.) was taken until to-morrow, 
Tuesdav, November -27, 1906, at 10 o'clock a. m. 



Washington, D. C, Nooember 27, lOOG — 10 o'cloch a. m. 

The hearing was resumed before Hon. William H. Taft, Secretary 
of AVar. 

The Secretary. Gentlemen, through an inadvertence yesterday I 
failed to remember that the first Cabinet meeting for some time 
would be held to-day, and I can not very well be absent. I am per- 
fectly willing to accommodate myself to the wishes of counsel, and 
either go on with the hearing this afternoon or postpone the whole 
matter until to-morrow. 

Mr. Johnson. It will be perfectly satisfactory to me to go on at 3 
o'clock this afternoon. 

Mr. CoHN. It is necessary for me. Mr. Secretary, if I am to make 
any statement, to go on to-day, as I am compelled to leave the city. 
It will not take very much time for me to get through. I have 
abandoned a hearing at Buffalo to be here to-day. I was to have 
appeared before the board of railroad commissioners there. 

Secretary Taft. I think there will be no objection to your going on 
this morning. You do not want, I infer from what you said, more 
than fifteen or twenty minutes '\ 

Mr. CoHN. That will cover our purposes, and whenever it is agree- 
able I will proceed. 

Mr. Johnson. Mr. Secretary, if you are going to sit until 11 
o'clock — the real fight, you know, is between the three companies. 

Secretary Taft. Yes. 

Mr. Johnson. This gentleman might go on, and we will try and 
squeeze ourselves into the time this afternoon. 

Secretary Taft. All right. You may go on, Mr. Cohn. 

Mr. CoHN. Yes, sir. 

statement of morris COHN, JR., REPRESENTING THE INTERNATIONAL 

RAILWAY COMPANY. 

Secretary Taft. Will you give me your name and the company you 
represent ? 

Mr. CoHN. To avoid any misunderstanding, I have written my 
name and the company's name on the brief. 

Secretary Taft. The International Railway Company? 

Mr. CoHN. The International Railway Company, 



TKANSMISSIOJSr OF POWER FROM THE NIAGARA RIVER. 95 

Secretary Taft. And your name is Morris Cohn, jr.? 

Mr. Cohn. Yes, sir. 

Mr. Secretary, I appear here on behalf of the International Rail- 
way Company, which is alluded to in the report of Captain Kutz, 
and Avas represented before you at the hearing in July. That com- 
pany is not quite, as Captain Kutz states, incorporated both in the 
State of New York and in the Dominion of Canada. It is a New 
York State corporation, and it has acquired, by purchase, all of the 
property, franchises, and rights of the Niagara Falls Park and River 
Railway Company, which was a corporation organizied under the 
laws of the Pi'ovince of Ontario. The Niagara Falls Park and River 
Railway Company Avas incorporated by chapter 9(5 of the laws of 
1892, and entered upon the construction of its railway by its fran- 
chise, and by its agreement with the commissioners, and by the origi- 
nal act it was given the right to develop such power from the waters 
of the Niagara River and the Falls of Niagara as might be necessary 
to work, heat, and light its railway. 

Secretary Taft. That is, the Canadian company was? 

Mr. Cohn. The Canadian company was. Before 1901 that com- 
pany Avas acquired in the interest of the International Railway 
Company. 

Secretary Taft. What Avas the route marked out on the charter of 
the Canadian company? 

Mr. Cohn. I liaAe here a maj) of the Avhole international traction 
system. 

The route of this Canadian company extends from Chij^peAva, just 
aboA'e the Falls of Niagara, to Queenston, and that is all there Avas 
of the route of the Niagara Falls Park and RiA^er Raihvay Company. 

Secretary Taft. That Avas the limitation mentioned in its charter? 

Mr. Cohn. That AAas the limitation in the original charter, the act 
of 1892; in fact, it Avas incorporated by special act. All the rail- 
ways there are incorporated by special act, and the act included all 
its rights, its poAA-er to act as a corporation, to operate a raihvay, and 
to generate poAver from the Avaters of the Niagara River. 

In 1900 or 1901 — in fact, in both years — legislation Avas obtained 
in both the Dominion Parliament and in the legislatiA^e assembly of 
the Province of Ontario and in the legislature of the State of NeAV 
York authorizing the International Raihvav Company to acquire 
all the property, franchises, and rights of the Niagani Falls Park 
and RiA'er Raihvay Company, and at the same time the right to 
develoiD poAver Avas changed from poAver to Avork. light, and heat 
the raihvay of the Niagara Falls Park and RiA^er Railway Company 
to such poAAer as might be necessary for the purposes of the purchas- 
ing company; so that the charter as amended clearly gaA^e, first, the 
right to the International Raihvay Company to purclias^, and, second, 
the right to the company to develo]:) such poAver as might be neces- 
sary for the purposes of the purchasing company. 

The International Raihvay Company at that time owned and oper- 
ated all the street raihvays in the city of Buffalo, and substantially 
all the street raihvays in the counties of Erie and Niagara, and all 
the electric railways in those counties. It AA^as using then, and uses 
noAv, a A^ery large amount of poAver. I think my brief shoAvs, as the 
fact is, that it utilizes, all told, a minimum of 12,000 horsepoAver. 



96 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Acting' in reliance upon this act of the legishitnre of the Province 
of Ontario and of the Dominion of Canada, the railwa}^ company 
acquired this Park and River Railway more particularly for its power 
rights than anything else, because the railway, as a railway, was not 
a very valuable proposition. The power rights were the important 
feature, and it was for those rights that the very large purchase price 
was given for the railway. 

Secretary Taft. When did it acquire it ? 

Mr. CoHN. The actual title was transferred in 1902, immediately 
subsequent to the acts of the legislature of the Dominion of Canada 
and the Province of Ontario. 

Secretary Taft. How much power had it developed by the time 
this act was passed ? 

Mr. CoHN. I can not say as to that, but I should say it was prob- 
ably about 1,500 horsepower. Of course the acquisition had pre- 
ceded this amendment of its charter, but it was for the purpose of 
getting the right to transmit all the power that was ultimately neces- 
sary for the International Traction system that the Park and River 
Railway Company was acquired. That is what gave it its chief 
value. Of course it was assumed that the authorities of the province 
would, when the railroad was acquired by the International Traction 
system, allow that power to be developed and used for that entire 
system. 

Secretary Taft. Had they before the act ])ut in any money other 
than the purchase price of this railway? 

Mr. CopiN. Nothing in the way of development. 

Secretary Taft. To develop the power ? 

Mr. CoHN. No ; it was subsequent to the act that $125,000 additional 
was invested, but we claim that a very large portion of the purchase 
price of the railroad was paid for the purpose of getting these power 
rights, making the original power rights of the Park and River Rail- 
way Company the foundation. 

Secretary Taft. But it lay dormant for about four years, did it? 

Mr. CoHN. The development lay dormant for about three years, I 
think — a little over three years. The company at the same time 
acquired these two bridges across the Niagara River, both of which 
have the right under their charters to transmit power, to lay cables 
and conduits to be constructed upon the bridge. 

Secretary Taft. ^Vlien did they obtain the bridges? 

Mr. CoHN. They were all bought at the same time, but of course 
this was a gradual gi-owth. All of these franchises and rights had 
been acquired with a view of ultimately combining the properties. 

Mr. Ely, who appeared before you yesterday, formerly president, 
but who is no longer connected with the International Railway Com- 
pany, was counsel for these bridge companies, and he had in his mind, 
long before the consolidation of these properties, the possibilities of 
combining them, and these various franchises for the bridges and the 
right to carry jDower across them were obtained with a view to ulti- 
mately combining all these railroads and putting them into one 
corporation. 

Secretary Taft. But you wanted those bridges to come over the 
river, did you not? 

Mr. CoHN. Oh, for both purposes. The bridges are especially de- 
sirable for carrying passengers and cars, more so than they are for 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 97 

power purposes; but the latter was an incident, and it went to the 
value of the bridges when they were taken in by the International 
Raihvay system. 

Secretary Taft. From the falls you run down to Queenston ? 

Mr. CoHN. Yes, sir. 

Secretar}' Taft. Do you cross at Queenston ? 

Mr. CoHN. We cross at Queenston. 

Secretary Taft. And then back again? 

Mr. CoHN. That road is another road. Then the cars are operated 
on the Niagara Gorge Railroad Companv back to Niagara Falls, 

N.y. 

Secretary Taft. But then it makes the loop? 

Mr. CoHN. It makes the loop. 

Secretary Taft. That was one of the advantages of acquiring that 
property ? 

Mr. CoHN. That was one of the advantages. 

Secretary Taft. And was the only advantage you used for three 
years ? 

Mr. CoHN. Substantially. Of course that is all subject to explana- 
tion, which I can very readily make. 

Secretary Taft. I should think you had better make it, I want to 
be frank with you. It seems to me your situation is not exactly like 
that of the other companies that have erected large plants before the 
passage of the act. You acquired something there which you had 
for a long time and did not use. 

Mr. CoHN. For about three years. 

Secretary Taft. You acquired it for other purposes, and you are 
running a railroad now. 

Mr. CoHN. Yes; we are in the business of running a railroad, 
but 

Secretary Taft. And this adds only to the convenience of your 
running the road ? 

Mr CoHx. It adds more than that. It adds to the economy with 
which the road can be operated. 

Secretary Taft. Yes, it does ; but your investment does not depend 
on that. 

Mr. CoHN. Not wholly, but to the extent that we have invested 
money in this power development and in the Niagara Falls Park and 
River Railway Company for the purpose of acquiring the rights 

Secretary Taft. But you ran that railroad as a part of your rail- 
road for three years without improving your railroad? 

Mr. CoHN. That is true. The point about that is this : We had no 
use for the water power on the Canadian side. There was enough 
power there to operate that road. The purpose of acquiring the 
water power was to use it on the American side. 

Secretary Taft. But you had not even begun before this act passed. 

Mr. CoHN. Very well. I want to explain that, if you will allow 
me just a minute. 

Until the acts of 1901 of Canada and the Province of Ontario we, 
of course, could not utilize on the American side the power developed 
on the Canadian side. So until the legislation Avas obtained it would 
have been folly for us to invest any money in the power development 
on the Canadian side so that we could use the power on the American 

18447—06 7 



98 TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 

side. There would be no sense in putting money into further pL^nt 
on the Canadian side for operating a road which we ah-eady had 
power sufficient to operate. 

Secretary Taft. Then, as I understand it, all yon did to work an 
estoppel, so to speak, against the Government was to obtain the right 
to use tlie power on the American side after you had bought the 
Canadian road? 

Mr. CoHN. That is true. 

Secretary Taft. And that is all you rest your ground of estoppel 
on? 

Mr. CoHN. No; not at all. Further than that, up to 1902, and 
even later, the American companies w^ere obtaining power undei- con- 
tracts with the Niagara Falls Power Company. Those contracts ran 
for a definite term. 

Secretary Taft. That was on the American side? 

Mr. CoHN. On the American side. Until those contracts expired 
or were about to expire, we could not even use the power on the 
American side, because we were bound to use power that was taken 
from the Niagara Falls Power Company, or at least to pay them. 
So that until those contracts expired it was not worth while either 
to make any investments in the power on the Canadian side; but 
immediately after the act was passed in 1901 and the property was 
legally taken over by the American company, the International Rail- 
way Company, the investment began to develop further power, and 
$125,000, as Captain Kutz reports, was expended to increase the 
power development on the Canadian side, the only place where we 
have any power development. 

The povver house was reconstructed, additional machinery was put 
in, the forebay and intake were enlarged and completed, and a devel- 
opment of about 3,600 horsepower was actually completed. That de- 
velopment can be, with the expenditure of a very slight amount of 
money, without any change in the head, increased to about 8,000 horse- 
power; that is, by slight enlargement of the wheel pit and the instal- 
lation of additional machinery. By increasing the head from 08 feet 
to 130 feet that power development could be increased from 8.000 to 
16,000 horsepower, and that would be practically sufficient to run the 
entire lines of the International Railway Company. 

We have not asked here for a permit for the whole amount of power 
that could be possibly develoj^ed from the forebay and intake which 
have already been constructed. We simply ask noAv for a permit to 
transmit such power as may be developed from our present forebay 
and intake ancl under the present head, which would be about 8,000 
horsepower, less what we are using on the Canadian side, which is 
about 1,000 horsepower. Captain Kutz reports that to be from 800 to 
1,200 horsepower. On average it would amount to not exceeding 1,000 
horsepower. 

So we have to-day practically 2,000 horsepower running to waste, 
and a plant in contemplation, which was in contemplation at the time 
this act went into effect, for increasing that power to 8,000 horsepower 
by a slight expenditure of money, giving us practically 7,000 horse- 
power which we could use on the American side. 

Captain Kutz has reported that no permit, in his judgment, should 
be granted at the present time because of an assumed controversy with 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 99 

the Canadian authorities about our right to transmit the power. I 
of course do not know the sources of Captain Kutz's information. 
It is a fact that the phm for the conduit from our powerhouse in the 
park to our bridge was not approved by the commissioners of the 
Queen Victoria ISiagara Falls Park; but the mere fact that that con- 
duit was not ai>proved does not in my judgment establish a dispute. 
Our rights, as we are assured by our Canadian counsel, are as clear 
and as fixed as those of any other company to develop and use this 
power for the purposes of the International Railway Company, the 
purchasing company, and that right includes the right to transmit it 
for their use. 

If the commissioners should withhold their approval for our plans 
for a conduit, it does not prevent us from using the power on the 
American side, because the poAver can be transmitted, possibly, in 
some other manner. AVe have a pole line along our railroad tracks 
from the power house to the bridge, and feed wires are carried on 
that. Some power is carried to this bridge now, where it is connected 
with wires that go across the bridge to the American side, and power 
can be transmitted in some degree, at least, through those wires. In 
fact, I take it that some power must of necessity be transmitted at 
different times of the day when the character of the load on the 
American side is such as to draw power to that side. The bridge is 
lighted on the American side from this power house, and I take it 
that under that act even the transmission of enough power to light 
the bridge on the American side would constitute a violation of it. 

The situation as it presents itself to us seems like this, that if this 
report of Captain Kutz is confirmed, and the action recommended 
by him is taken by you, we are practically foreclosed from going 
ahead with our development, even under the 68-foot head. There 
would be no sense or reason, perhaps, in our installing additional 
machinery to develop the power up to 7,000 horsepower, because we 
would have no use for it, and all the expenditure we have made in 
the forebay, intake, tunnel, and tailrace, all of which is of sufficient 
capacity to develop 8,000 horsepower under the present head, would 
go for naught, because these permits, whatever may be their effect up 
to 160,000 horsepoAver, are the only permits which seem to be desir- 
able. It is said by the members of the International Waterways 
Commission that the 160,000 horsepower permits are permanent per- 
mits. It is said by Captain Kutz that they are permits in the nature 
of experimental permits to see what an effect such an amount of 
power development would have upon the falls; but in either event 
they are valuable permits, the permanent ones, and if permits are 
granted to others up to the full amount it practically forecloses us 
from building our present contemplated development, and certainly 
would foreclose us from deepening our Avheel pit and developing the 
power under the 136-foot head, which Avould increase by 100 per cent 
the development. 

Secretarj^ Taft. Just what expenditure do you claim constitutes 
the basis upon which you are to be allowed any permit at all ? 

Mr. CoHN. This expenditure Ave have made in acquiring the Park 
and RiA^er Raihvay Company — the expenditure Ave haA^e made in 
acquiring the bridges for the right, among others — ^of course not 
entirely, but partially for the purpose of allowing this poAver trans- 
mission — the expenditure of $141,000 in this poAver plant in the last 



100 TRANSMISSIOlSr OF POWER FROM THE NIAGARA RIVER. 

two or three years to obtain an amount of power which is of no vahie 
to us on the Canadian side. 

Secretary Taft. Was not that expended since the act? 

Mr. CoHN. Not since this Burton Act. 

Secretary Taft. That is what I mean. 

Mr. CoHN. Oh, no; long before the Burton Act, but since the act 
on the Canadian side allowing us to use the power on the American 
side. It was all completed before the Burton Act took effect, or before 
it was introduced. I think Mr. Stetson can corroborate the fact, 
because he was at that time a director of the International Railway 
Company when the power was increased. 

Secretary Taft. I misunderstood you. I understood you to say 
that 3^our improvement had begun since the Burton Act was passed. 

Mr. CoHN. Oh, no; not at all. I misunderstood you. When you 
asked me if it had preceded or succeeded this act, I had in mind the 
act of the Province of Ontario under which we were allowed to take 
it into the United States. We have, I think, for upward of two years 
been trying to obtain an approval of our conduit to carr}^ the trans- 
mission wires through the park, and the power development in the 
power house was completed at about that time, so far as it is now 
complete, to the extent of 3,(500 horsepower. We intended to develop 
this power, as we would be enabled by the expiration of contracts to 
use it on the American side and did not care to install machinery and 
have it practically idle there until we had use for the power on the 
American side. 

The contract for the power in the Niagara Falls district expires on 
the 31st day of December this year^ — that is, in Niagara Falls, N. Y. 
We are to-day obtaining the power to operate the street railway in 
the city of Niagara Falls from the Niagara Falls Power Company. 
That contract expires on the 31st of December of this year. We will 
then be in a position to utilize at least the amount of excess power 
which we now have in this Canadian power house on the New York 
side at Niagara Falls, N. Y. ; so that we think the permit for 2,500 
horsepower should be immediately granted. 

On the other hand, we think if this report is approved in the form 
in which it is it will operate adversely to us in our obtaining approval 
of our conduit through the park by the Canadian govermnent, and 
inasmuch as Captain Kutz recommends that permits be granted to 
the other company for 157,500 horsepower, whereas only 131,000 
horsepower is, according to his report, going to be sold in the United 
States, thereby giving to the other companies 26,500 horsepower more 
than is going to be sold at the present cleveloijment in the United 
States, it occurs to us to be a trifle unfair to hold us down to 2,500 
horsepower, which is only about one-third of what we could develop 
in our present power house, and grant to others permits for power in 
excess of their present use or present sale or contemplated sale within 
the United States, because he says : " The total capacity of the gen- 
erating machinery installed and ordered for the three plants is 
171,000 horsepower. The probable demand in the near future fi'om 
Canadian markets will not exceed 40,000 horsepower, leaving 131,000 
horsepower for sale in the United States." 

Yet he recommends, in view of the fact that further development 
is necessary to afford a reasonable return on the money invested, that 
there be immediately granted to these three larger companies permits 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 101 

for 157,500 horsepower, and leaves us with only 2,500 horsepower in 
any event, and that not to be immediately granted. We say the ])ro- 
pokion is altogether unfair and unjust to us, and that we should be 
permitted now" to. have the right to transmit 2,500 horsepower, and 
that there should be made a specific reservation for at least 4,500 
horsepower additional in case we shall be in a position to make fur- 
ther application for it at an early date. 

Inasmuch as your honor has had in your mind, perhaps, that this 
development of ours has succeeded the passage of the act of Congress, 
I of course would like you to refer that matter to Captain Kutz or 
anybody else who is acquainted with the matter to make a report 
upon that subject. 

Secretary Taft, I will examine into it. 

Mr. CoHN. Because that development preceded the act by two 
years. In fact, the development of the Niagara Falls Park and 
River Railway Company was the first development of power on the 
Canadian side, and if anyone is entitled to a preference here by 
reason of priority of development, we certainly are first on the list. 

Mr. Johnson. Mr. Secretary, Mr. Stetson will take up the time 
until 11 o'clock, and if you will sit then from 3 to 5 Mr. Cravath and 
I will attempt to finish within that time. 

STATEMENT OF FRANCIS LYNDE STETSON, REPRESENTING THE NIAGARA 
FALLS POWER COMPANY AND THE CANADIAN NIAGARA POWER COM- 
PANY. 

Mr. Stetson. Mr. Secretary, before oi^ening what I have to say 
upon the other subject, I wish to say something about the Inter- 
national Railway Company. 

I was one of the organizers of that railwaj^ company, and I think 
perhaps I know quite as much about the conditions as Mr. Cohn 
does. As I said in my brief, I had not intended to discuss it, but 
there are two statements, one of which my friend may not like as 
much as the other, but I think it should be made. In tlie first place, 
Mr. Cohn says that company was the first company to develop 
power on that side, but that is true only with the qualification that 
they were limited strictly to development of power for purposes of 
the railroad. When we bought and organized in 1892 the Canadian 
Niagara Company, that other contract was in existence, but was 
strictly limited to the purposes of the Park and River Railroad on 
that side. 

Secretary Taft. And from Queenston to the falls? 

Mr. Stetson. Yes, sir; from Chippewa to Queenston. It was 
expressly prohibited from using it for any other purpose. That is 
the fact of the original development. So as Mr. Cohn has repeated 
this twice, once at Niagara and once here, that they are the pioneers 
on the Canadian Niagara side, it compels me to call attention to the 
fact that they were pioneers, but only for the limited and express 
purpose of operating the railroad. If nothing more than that had 
occurred, you would have no embarrassment in meeting this question, 
because there could be no transmission to the United States. 

But something else has occurred. In, 1901 the International Rail- 
way and the Canadian Niagara Company entered into an agreement 
by which we consented to the relaxation of that prohibition, and took 



102 TKANSMTSSION OF POWER FROM THE NIAGARA RIVER, 

it off, SO from that time it did have a right to transmit to this side 
for its own jDurposes only — not for any other purpose, but for its own 
purpose. 

About that time — and that is a very important thing which Mr. 
Cohn has not stated — the power house burnt down. They lost all 
their j)ower, and in the reconstruction of that power house, in 1901, 
it was deemed wise, for then I was one of the directors of the com- 
pany, to enlarge the wheel pit and to make the larger provision, 
which, as Mr. Cohn says, now exists, and that provision was made 
and completed entirely prior to the Burton Act or any thought of the 
Burton Act — ^years before. 

To the extent of the money that was invested in that enlargement, 
there is the ground of estoppel. I do not agree with my friend, Mr. 
Cohn, that the original purchase of the Park and River Railroad had 
any relation to it. We bought the railroad without the right of 
transmission, and we paid our money without such right. I know 
what I am speaking about, because I was in the transaction. Mr. 
Ely may have had that in his heart, but he never communicated it to 
his associates until long after. I know what I am sj^eaking of here. 

But I think their claim is enough. The expenditure that was 
made in good faith in the year 1901. for the purpose of enlarging that 
wheel pit for its transmission is just as good, for the purpose of 
estoppel, as though it w^ere the whole amount of the original pur- 
chase. 

Secretary Taft. How much did it amount to? 

Mr. Stetson. I think it was some four or five hundred thousand 
dollars, was it not, Mr. Cohn? I do not know the figures. 

Mr. Cohn. The purchase price is stated in the transfer to the Inter- 
national Railway Company 

Secretary Taft. I mean the reconstruction. 

Mr. Cohn. That I do not know. 

Mr. Stetson. I think it was some four or five hundred thousand 
dollars. It was a great deal more than it ought to have been. I 
know that. 

Mr. Cohn. The total reconstruction ? 

Mr. Stetson. No; the additional power. It was a great deal more 
than it ought to have been. It was a very wasteful construction, 
though I was in part responsible for it. But there was, in good 
faith, a large amount paid there on the idea that that power could 
be used for the operation of the railway on the American side. The 
limitation as to the Canadian side being w^aived, but the limitation 
as to its use for a railway never having been waived, there is no 
right to use it for any other purpose than a railway, under our 
agreement. 

Mr. Cohn. There is no claim or disposition on the part of the com- 
pany to use this power or sell it for any other purpose than its 
railway, but, as from time to time contracts with Mr. Stetson's 
company expire, it would be extremely advantageous to us to have 
this power which we are developing ourselves, instead of paying Mr. 
Stetson's company a large sum for it. Captain Kutz states in his 
report that the transmission of the 2,500 horse):)OAver to the United 
States would result in an estimated saving of $30,000 a year. That 
is $12 a horsepower, and seems to us to be a very low figure. 

We do not buy any at $12 per horsepower per annum, and if the 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 103 

full amount of 7,000 horsepower under the present head could be had 
on the same basis, it would result in a saving to this company of 
$81,000 a year. I do not know whether it was ever in Mr. Stetson's 
mind or not that the power rights of the Niagara Falls Park and 
River Eailway Company were a valuable part of that railroad, but I 
do not think there was anything about the railroad in 18!)!) that had 
any attraction in and of itself. It was not a paying proposition. It 
was being operated certainly at no profit to those who owned it at 
that time, and if it were not for the power rights 

Secretary Taft. But it made the loop. 

Mr. CoHN. It helped to make the loop. 

Secretary Taft. You did not buy the bridges, and what you bought 
did not give you the right to come across. 

Mr. CoHN. No; not at that time. That is true, but if those who 
purchased had in mind that if they purchased and under the rights 
obtained they could take the power across, it probably formed a valu- 
able part of it. 

Secretary Taft. What you, in your fancy, look forward to is a 
ver}^ slim matter for an estop]3el. 

Mr. Stetson. Mr. Secretary, I say distinctly it Avas not in mind, 
for I know what was in mind. I raised the money myself. I made 
contracts over on the Canadian side, not Mr. Ely. I know we bought 
it with the idea that w^e were not going to loose the business of the 
whole International Railway Company as a customer of the power 
company, and, of course, at the time -we bought the railroad, which 
w^e would have for our largest customer, we were not also building 
up a rival. Mr. Cohn may speak at second hand. I am speaking of 
what I know first hand. 

Mr. CoHN. I suppose those who participated in it may have all had 
different views ? 

Mr. Stetson. No ; we did not. We communicated with one another. 
If Mr. Ely were here we w^ould not have this discussion. 

Mr. CoViN. However, we have the power house there, and it is of no 
value unless we get this permit. We are in a position to develop 
4,000 more horsepower, with a very slight additional expenditure, all 
of wdiich wall be of no value to us unless we can secure a permit to 
utilize the power on the American side. The money was expended 
before the passage of the Burton bill. 

Secretary Iaft. Perhaps you will want to build a Canadian 
railway? 

Mr. Cohn. I do not think our experience in Canadian railways 
w^ould justif\^ us in spending any more money over there. The profit- 
able part of the railway system is, of course, in the large cities of 
Buffalo and Niagara Falls, and not along the borders of the Niagara 
River. 

Mr. Stetson. I do not contest the latter part of Mr. Cohn's state- 
ment at all. I think it is a generally proper basis for all he is claim- 
ing. I am not saying anything about that, but the basis is the 
expenditure in the recouhtruction of that work in 1001, and has no 
relation whatever to the original purchase. Indeed, the development 
of power at that time would have been contrary to the original pur- 
pose, because it w^as bought by us for the Niagara Falls Power Com- 
pany. As I say, we were not intending to build up a rival. We were 
intending to build up a customer. 



104 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Mr. Secretary, yesterday I concluded what I had to say upon the 
general subject, and I omitted that portion of my brief which begins 
at page 17, referring to the prior and preferential right of the Cana- 
dian Niagara Company. 

I do not intend to take much time this morning in the discussion 
of this question. I shall ask the privilege, after we come together this 
afternoon, of a little time to reply to my friends; but I think we can 
save a little time by laying before your honor the basis of our con- 
tention. 

At page 29 you will find Appendix A, which states the legal propo- 
sitions, and I would like to turn to that first as stating the history. 

The Canadian Niagara Company is, and ahvays has been, recog- 
nized by the Queen Victoria Niagara Falls Park commissioners as 
the " pioneer company.'' (19th report, pp. 12-13; 18th report, p. 5.) 

The first contract between this company and the commissioners was 
made April 7, 1892 (16th report, p. 14) ; the modifying contract 
July 15, 1899 (14th report, p. 11). 

Clause 11 of the modifying contract (p. 17) provides that if from 
any cause the supply of water at the point of intake should be dimin- 
ished the company should have no claim or right of action against 
the commissioners, " nor give to the company " (that is ourselves) 
" any right of action against other licensees or grantees of the com- 
missioners '' — there were none at that time; this had a prospective 
view — '' in respect of any diminution not substantially interfering 
with the supply necessary for the company." 

Therefore our contention is that a substantial interference by any 
subsequent license was limited and forbidden by that act, and would 
give to us a right of action and claim against those subsequent 
licensees. Those two subsequent licensees are here, the Ontario 
Power Company and the Electrical Development Company. 

The subordinating effect of this clause has been forced upon the 
recognition of each of the junior lessees (for we are all lessees alike 
under the park commission). Under this contract the Canadian 
Niagara Company began its work May 31, 1901 (16th report, pp. 
5-11), before either of the other companies had even acquired a right 
to their present works and long before such works were begun. 

We had begun our work before either company had acquired a 
right to their present location and long before their works were 
begun. 

Now we come to the other two companies. 

The Ontario Power Company entered into its first contract with 
the commissioners, that concerning the waters of the Welland 
Kiver— April 11, 1900 (14th report, p. 25; 16th report, p. 3; 19th 
report, p. 11), and its second contract — that concerning the Niagara 
River — and its present and onlv constructed works, August 15, 1901 
(lethreport, p. 19). 

I call your attention there to the proposition; originally they were 
not intending to use the waters of the Niagara River at all. They 
had got an ingenious scheme for taking the waters of the Welland 
River above Chippewa and discharging them down into the Niagara 
River above the Niagara Falls — that is, it would have been a Welland 
River development and not a Niagara River development and would 
have had no effect whatever upon the falls of Niagara. That was 



TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 105 

the original scheme which was referred to, and they call it their first 
development. 

Secretary Taft. Would there not be a good deal of fall there? 

Mr. Stetson. There would be some fall. That also would be pro- 
hibited under the act of Congress if that act were applicable on the 
Canadian side, because the Welland River is one of the tributaries of 
the Niagara River. I do not think these gentlemen should be limited 
in any way in the development of that Welland right, for it has no 
effect upon the Niagara Falls at all, and I recognize the full right they 
have there to continue that, and that is what they are paying for. 

The reason, as I started to say, why they pay twice as much as the 
rest of us is that they have two rights. They have the Welland 
River right, for which they pay $15,000, and they have the Niagara 
River right, for which they pay $15,000 a year. AVe all stand alike 
as to our rights in the Niagara River. We pay as much as they do 
as an initial rent, because they have this additional right in the Wel- 
land River. You will observe that even the Welland River right suc- 
ceeded and was posterior to our contract right of July 15, 1899, 
though it was anterior to the actual beginning of our work, which 
Avas in 1901. Their Niagara River right, which accrued August 15, 
1901, Avas subsequent to the beginning of our work on May 31. 1901, 

So, in every respect, they are subsequent to us, and how subsequent 
will be shown as I refer to the t^rms of the Ontario Company's contract. 

The rights of the Ontario Company were expressly subordinated 
to those of the Canadian Niagara Company by clauses 7 and 8 of the 
second Ontario contract, which were as follows (16tli report, p. 21) : 

7. Providecl that the works on the premises delineated on the plan hereto 
annexed shall not interfere with or deprive the Canadian Niagara Power Com- 
pany of the right to construct, operate, and maintain the underground tunnel 
leading the waters of the Niagara River from the power houses and wheel pits 
which they are about to erect and develop in pursuance of the several agree- 
ments entered into between the commissioners of the Queen Victoria Niagara 
Falls Park [herein stvled the commissioners] bearing date 7th April. 1892. 15th 
July, 1899, and 19th June, 1901. 

8. And the company [that is, the Ontario Company] shall indemnify the 
commissioners from all claims or demands by any i>erson or i>ersons whom- 
soever, whether arising by reason of the exercise by the company of the powers, 
rights, or authorities or any of them conferred by the hereinbefore-recited acts 
of the parliament of Canada, or either of them, or by reason of anything done 
by the company in the exercise thereof affecting any property, rights, or privi- 
leges heretofore by the connnissioners granted to or conferred upon any person 
or persons whomsoever, or enjoyed, used, and exercised by any such person 
or persons under the commissioners, it being the intention of this agi'eement 
that shruid the comijany [that is, the Ontario Company] in the exercise of the 
aforesaid i):fwers, rights, and authorities so affect any such property, right, or 
privileges granted by or enjoyed under the commissioners [that is, our prop- 
erty], the company shall fully indemnify the commissioners in respect thereof. 

The Ontario Company did no work upon its present plan prior to 
December 31, 1901 (l()th report, p. 4), but began such work shortly 
after the delivery of the third agreement, dated June '28, 1902, which 
w^as not A^alidated until August 7, 1902 (l7th report, p. 12), after the 
Canadian Niagara Company had spent and incurred more than 
$1,500,000 upon its entire plans for the full development of 100,000 
electrical hor.sepower (l7th report, p. 50). 

That should not be 100.000 horsepower. It should be 121,000, al- 
though in the report it was called 100,000. We Avere proceeding on 
the basis of Avhat the installation Avould produce. 



106 TEAISrSMISSION OF POWEK FROM THE NIAGARA RIVER. 

I come now to the Toronto and Niagara Power Company, repre- 
sented by Mr. Macrae and Mr. Johnson. 

The Electrical Development Company (Toronto and Niagara 
Power Company), through its promoting syndicate, made its first 
agreement with the connnissioners January 29, 1903 (17th report, 
p. 30), long after the vesting of the rights of and after the begin- 
ning of actual AYork by each of the other two companies, whose 
priority, as in the Ontario contract also, was expressly recognized 
by the Commissioners (iTth report, pp. 12-13). 

The rights of this Toi'onto syndicate were expressly subordinated 
to those of the Ontario Compan3^(lTth report, p. 32, clause 5). 

There can be no conflict, in my judgment, between Mr. INIacrae's 
company and the Ontario Comjjany, because there is- there the utmost 
precision of statement — " and of all prior grantees," including, of 
course, the Canadian Niagara Company (ITth report, p. 37, clause 17; 
see also 17th report, p. 41, clause 5). ■ 

The syndicate w^as required to deposite $25,000 as a guaranty 
against injury to works of the Canadian Niagara Company or of 
the International Railway by diversion or diminution of the current 
(19th report, pp. 16-19; 20th report, p. 16). The prior rights of 
these earlier grantees were also expressly recognized in a further 
agreement dated January 9, 1905, between the Electrical Develop- 
ment Company and the commissioners (19th report, p. 30, clause 3), 
which, however, failed of legislative ratification. 

They had made an application and got from the commissioners the 
right to another 100,000 horsepower, wdiich w^as repudiated and failed 
of ratification by the provincial assembly of Ontario, and in that 
agreement, which is printed in the report, there is the very fullest 
recognition of our precedent rights. 

In their memorandum of argument, submitted in December, 1902, 
before tlie Canadian commissioners (17th report, pp. 51-52), Sir 
Christopher Robinson and Mr. Macrae, the counsel for the Toronto 
Company, made the following statement : " If the Canadian Niagara 
Power Company can demonstrate that the taking of water in the 
manner proposed by the applicant will cause physical injury of a 
substantial kind to their licensed works, the government would be 
justified in refusing the applicants permission; but the burden of 
establishing this injury rests upon that company." 

This necessary admission as to the immmiity of the physical struc- 
tures of the Canadian Company from injury through the establish- 
ment of the works of the Toi'onto Company, by necessary implication 
concedes also the immunity of the Canadian Company in the opera- 
tion of its Avorks from depreciation or diminution of its granted 
rights in order to enable the Toronto Company to operate its junior 
works to their full extent. 

In other words, the undoubted right of the Toronto company un- 
der its agreement of January 29, 1903, to use the Canadian reserva- 
tion waters therein granted, is a right to take such waters only to the 
extent that they are available after the prior grants of the commis- 
sioners shall have been fully satisfied. This priority of right entitles 
the prior licensees to preferential consideration according to their 
priorities whenever and wherever conflict in respect thereof may arise 
among the several licensees. Certainlv it should not be overlooked in 



TRANSMISSION OP POWER PROM THE NIAGARA RIVER. 107 

the present discussion, which is to be concluded upon a full recogni- 
tion of all the equities of all the parties. 

I see it is nearly 11 o'clock, and I had better suspend, I suppose, and 
come back to the other part afterwards. 

The Secretary. Just as you will. You may do that if it is more 
convenient, because when I begin at 3 o'clock I can sit until we get 
through. 

Mr. Stetson. I thought that might save your time. 

The Secretary. Then we will take a recess until 3 o'clock. 

A recess was thereupon, at 10.55 o'clock a. m., taken until 3 o'clock 
p. m. 

after recess. 

The hearing was resumed at the expiration of the recess. 

STATEMENT ( CONTINUED) OF FRANCIS LYNDE STETSON. 

Mr. Stetson. Mr. Secretary, I wish not to correct, but, perhaps, to 
explain, a statement I made this morning with reference to the rights 
of the Ontario Power Company in the Welland River. When I spoke 
of their right to take from the Welland River, without any water 
from the Niagara River, I was referring to that which was their right 
under the Dominion charter, that was granted away back in 1887. 
Under that charter the}^ might have taken water from the Welland 
Canal, but they were expressly limited so that they could not go 
through the Queen Victoria Niagara Falls Park without permission 
from the connnissioners, and until they got permission to go through 
the Queen Victoria Niagara Falls Park, which was not given until 
1899, they could take no water from the Niagara River excepting by 
taking it around away on the outside of the park, which would have 
been at a prohibitive cost. They would have had to go from Chip- 
pewa around outside of the park to the lower river. 

I have given you the facts in the appendix.. I will now ask a few 
minntes only to speak of the deductions which I would make from 
those facts. 

In their report the American commissioners say that Captain Kutz 
concludes '* that there is no sufficient reason for discrimination be- 
tween the Canadian companies except their relative ability to com- 
mand the Canadian market." 

In reaching this conclusion. Captain Kutz, as a layman, naturally 
enough has failed to take into account the consideration to which in 
equity our Canadian company is entitled as the prior appropriator 
and licensee of the water. We annex an appendix, "A," showing that 
at all times our prior and superior rights have been recognized by 
the Queen Victoria Niagara Falls Park commission, and perforce 
by each of the other companies now claiming their subordinate 
rights. 

I do not for a moment pretend that there is any legal claim here 
that compels your judgment. I am merely endeavoring to establish 
two propositions : First, that if the commissioners of the Queen Vic- 
toria Niagara Falls Park, representing the provincial authorities, 
under whom we claim, were considering this question they would, in 
my judgment, give us this priority. I think that is something in 



108 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

equity that is entitled to consideration from you in determining how 
the suffering must be distributed, if we have to suffer. 

Under the established rules concerning water courses and riparian 
rights, if by a physical convulsion the waters of the upper Niagara 
River were to be carried into the American channel so as to leave 
available for use on the Canadian side only 100,000 horsepower 

When I use that term it means 121,000, or whatever our rights are. 

It was easier to deal with 

our company in equity would be entitled to the whole of that power 
though the two junior lessees were to go dry. Correspondingly, if 
by the act of law flow of the river available for power transmission 
to the United States is to be reduced to 160,000 horsej)ower, then our 
juniors should first suffer reduction for this purpose to 00,000 horse- 
power, for they are not entitled to consideration to the detriment of 
our prior right to 100,000 horsepower for any and all purposes. The 
three successive rights of the three principal lessees must in equity 
be reduced if at all in the inverse order of alienation by the Canadian 
authorities. I make no reference to the International Railway Com- 
pany, whose rights we do not discuss. 

Another ground upon which we base our claim to preferential 
consideration is the comprehensive purpose of the act of Congress of 
June 29, 1906. The object of this act is to preserve Niagara Falls in 
their entirety — not the Canadian Falls alone, nor the American Falls 
alone, but the entire natural wonder — for the gratification not of 
Canada alone, nor of America alone, but for all mankind. 

With this generous purpose I heartily sympathize, provided that 
it shall be accomplished, as it can be accomplished, with a just regard 
to honest rights in the order of their priorities. In this compre- 
hensive view of the subject it is to be considered that the two com- 
panies now represented b}" me are substantially one, and that their 
developments have been and are mutually interdependent. For this 
reason we have not resorted to the semblance of a contract between 
them. 

We could draw between these two companies contracts similar to 
those that anybody else could execute and could bring them here; but 
that would be only a pretense between the two companies, which are 
one just as much as the possibilities of two different corporations can 
permit. 

Thus considered, it will become evident that the Niagara Falls 
Power Company is suffering more than any other company, for it 
has been forbidden to proceed under its charter right to construct in 
New York a second timnel for 100.000 horsepower, for which it has 
acquired its right of way and made large expenditures. It is also 
hindered from proceeding under the charter right of the Canadian 
Niagara Company to complete the second half of its wheel j^it, al- 
ready excavated, for the erection of six 11,000 electrical horsepower 
turbines and dynamos. As the greatest sufferers we submit that 
nothing should be conceded to our juniors because of their lesser and 
inferior deprivations. 

The Orttdrio com])a)i]fi< position. — The Ontario Power Company 
in its printed memorandum has submitted certain claims for special 
consideration, to which, in our view, it is not entitled. 

(a) The claim of the Ontario company that it uses the Avater more 
economically than any other company is not accepted by Captain 



TRANSMISSION" OF POWER FROM THE NIAGARA RIVER. 109 

Kiitz (p. 13, clause 27). It may not be irrelevant also to suggest 
that as this economy is due to the construction of a power house 
directly and conspicuously in front of the Falls, it is unlikely to be 
regarded as a merit by those who are seeking to protect and preserve 
the scenic grandeur of Niagara. The construction of this power 
house directly in Niagara Gorge was the subject of timely and vigor- 
ous protest by Mr. Andrew H. Greene and his associate commissioners 
to the Canadian commissioners, as fully considered in their seven- 
teenth report at page 9. And I would like to ask the Secretary if 
he wishes to have these reports left. 

Secretary Taft. Yes; I should like to see them. 

Mr. Stetson. I will leave them. 

(h) The suggestion that the Ontario company is entitled to special 
consideration because it is paying twice as much rent as any other 
company is incomplete. It should have been added that for each of 
its grants each of the three Canadian companies pays the same initial 
rent of $15,000. The Ontario company has two grants, of which one 
is uj^on the Welland River, Avhicli it does not now choose to use, but 
which it is at liberty to use. After the rents covering 40,000 elec- 
trical horsepower, each of the three companies is to pay exactly the 
same rent for all of its powder. Uj^on the sale of 40,000 electrical 
horsepower two of the companies will pay $37,500 and the Ontario 
company will pay $47,500. As the Ontario company asserts that it 
has contracted to sell more than 40,000 horsepower it would seem as 
though now its rental will not be materially more than that of the 
other two companies. That is, there would be that excess of 100,000 
after they reached 40,000 above the rest of us, but that is because they 
have an extra power conceded. 

If the amount of rental is of consequence, the Canadian Niagara 
Company, which has been paying rent since 1892 — eight years longer 
than any other company — ^clearly is specially entitled to considera- 
tion. These payments, uj) to 1906, are shown as follows by the com- 
missioners' reports (19th, p. 11 ; 20th, p. 16) : 

Canadian Niagara Company .$239,577.73 

Ontario Power Company 140,000.00 

Electrical DeA'elopment Company 37,500.00 

Mr. Green. What date was that ? 

Mr. Stetson. That was including last year — not 1906. These are 
just what is shown in the report. 

Mr. Green. 1905. 

Mr. Stetson. 1905. I recognize that you have gone on and jDaid 
your rent since, but that is the last printed report I had, and the last 
that was issued, I think. 

(c) The plant investment in August, 1906, of the Ontario com- 
pany proper ($5,542,000) is not greater, but is less than that of the 
Canadian Niagara Company ($6,250,000). (See Captain Kutz's 
report, p. 7, clause 7; p. 10, clause 16.) 

The additional expenditures by the Ontario company's customer, 
the Niagara, Lockport and Ontario Company, are insignificant com- 
pared with those of the Canadian Niagara Company's principal, the 
Niagara Falls PoAver Company, and its subsidiary companies in Niag- 
ara, Tonawanda, and Buffalo, with their four transmission lines, and 
the manj^ customers, all exhibited to Captain Kutz. 



110 TRANSMISSION OF POWEE PROM THE NIAGARA RIVER. 

He had a list of every customer. They were gone over by him and 
by Mr. Faust, the most able and competent representative of the 
Attorney-General, and our position there can not be contested. 

The actual investment on the faith of this development of the Cana- 
dian Niagara Company has been and is more than that of all the other 
Canadian companies and their subsidiary companies combined, in 
addition to having the great element that we put all of this capital at 
risk before any of our friends followed us. 

The prospect of service rendered or to be rendered by the Ontario 
transmission line is highly colored by hope, as shown by the cold 
facts arrayed by Captain Kutz in section 10 of his report. 

Proceeding from a present actual delivery of 700 horsepower and 
a present firm contract for only 14,240 horsepower, the Ontario com- 
pany deludes itself into the plea that it is to be considered on the 
basis of an actual contract for 90,000 horsepower, if not for 180,000 
horsepower. 

The statement of the Ontario company calls attention to the fact 
as to how great a territory they serve as compared with ours, and how 
many people live in it. The question is not How many people live 
in the territory, but How many users of power are likely to live there. 

It is notorious that power is used not in sparsely-settled country 
districts but in centers of population. 

The Ontario transmission line runs through 150 miles of rural 
territory to reach Syracuse, a city with less than one-third of the 
population and with only thirty-four one hundred and seventy-sec- 
onds of the manufactured products of Buffalo, to which with its con- 
tiguous outlying districts the Niagara Falls Power Company now is 
actually supplying 40,000 horsepower with a demand for 5,000 more. 

As may be seen by reference to Census Bulletin 57 already quoted, 
the value of manufactured products in 1905 was as follows: 

Buffalo $172, 115, 100 

Niagara 16, 915, 786 

$189, 030. 886 

Rochester 82, 747. 370 

Syracuse 34, 823, 751 

Lockport 5,807,908 

123, 378, 959 

Total 312, 409, 845 

The lighting and transportation requirements keep pace with the 
manufacturing conditions. 

We respectfully invite the Ontario company to show exactly how 
much power it is actually supplying in Syracuse or elsewhere, and 
also how much power it is bound to supply there or elsewhere to any 
customer other than its subsidiary transmission company, i. e., itself. 

Upon this point of actual delivery of power, it may be well now to 
exhibit somewhat more clearly than heretofore the necessities of our 
two combined companies, the Niagara Falls Power Company and the 
Canadian Niagara Company. 

To the amount of 85,000 horsepower, stated on pages 8 and 14, of 
the brief of the Niagara, Lockport and Ontario Company and on 
page 2 of the brief of the Ontario company, and stated also on page 
11, paragraph 20, in Captain Kutz's report, as the electrical load of 
the " combined companies " (the Niagara Falls Power Company 
and Canadian Niagara Power Company) must be added, approx- 



TKANSMISSTON OF POWER FROM. THE NIAGARA RIVER. Ill 

imately, 8,500 horsepower, the amount of the Niagara Falls Power 
Company's hydraulic load delivered to the International Paper Com- 
pany and not converted into the form of electricity. 

That has escaped attention. It did not escape General Ernst's 
attention, but in Captain Kutz's report it is not referred to, at all 
events, and has to be added to the electrical load. 

As a matter of fact Captain Kntz somewhat underestimated the 
maximum electrical load of the combined companies. During the 
winter of 1905-6 it was substantially 90,000 electrical horsepower. 
Adding 8,500 horsepow^er, hydraulic, we have at that time a com- 
bined load closely approximating 100,000 horsepower. 

With adequate provision for reserve and for necessary repairs 
in practice and under present conditions, the American electrical 
plant working to its capacity can not be relied upon for 85,000 horse- 
power. 

The printed statement made by the Niagara Falls Power Company, 
and submitted to Captain Kutz under date of July 27, 1906, gives 
the power contracts of that company in detail, and shows an aggre- 
gate of 167.740 horsepower subject to call thereunder on the Ameri- 
can side. The originals of these contracts ako were all submitted to 
Captain Kutz, and those for larger amounts of power were gone over 
in detail by him and by his associate, Mr. Faust, of the Department 
of Justice. The printed statement of the same (Niagara Falls 
Power) company to the Secretary of War, dated July 3, 1906, gives 
the amount called or in use under each of these contracts. 

This amount then aggi'egated 102,550 electrical horsepower. Since 
that time several power consumers have increased or called for addi- 
tional power in a considerable amount, notably the Niagara Electro- 
Chemical Comj^any, which now is installing additional electrical 
apparatus to use up to a maximum of 4,500 horsepower; the Pitts- 
burgh Reduction Company, to use up to a maximum of approxi- 
mately 10,000 horsepower, and the Union Carbide Company up to 
25,000 horsepower. The Cataract Pov\ er and Conduit Company, the 
Buffalo distributing agent of the combined companies, already, dur- 
ing the present month, has called upon our combined companies to 
provide at their power houses a maximum which, with the Tona- 
wanda demand, will call for 40,000 electrical horsepower, and during 
the month of December will require provision, at the power plants, 
of not less that 5,000 electriciil horsepower in addition to the amount 
last mentioned. 

Secretary Taft. I thought that the Pittsburgh Reduction Com- 
pany was the patron of the Schoelkopf company ? 

Mr. Stetson. It is the tenant both of the Schoelkopf company and 
of the Niagara Falls Power Company. The Pittsburgh Reduction 
Company is the company working out the patent of Mr. Hall and 
Mr. Davis, making aluminum. That is probably the most important 
use of electricity that has ever been developed. If Niagara Falls had 
never done anything else, it would have been worth all it cost in the 
application of this wonderful patent of Mr. Hall in bringing that 
which was almost within the range of semiprecious metal down to 
the range of comj^etition with copper, so that we use these aluminum 
lines for transmission from Niagara to Buffalo on the American side, 
and we have put in another on the Canadian side. Lord Kelvin said 
there was only one thing that would prevent the revolution of the 



112 TRANSMISSION OP POWER FROM THE NIAGARA RIVER. 

world by electricity, and that v.as that there was not enough copper 
to carry it. Aluminum has been developed out of the dust of the 
earth, in quantities that never can be exhausted ; and I say that alone — 
that wonderful invention of Mr. Hall, supi^lied under the wise super- 
vision of Mr. Davis — would in itself be a blessing to mankind such as 
can not be overestimated, even if there had been some apparent dimi- 
nution in the volume of Niagara, as there has not been. 

The amount of 25,000 electrical horsepower which the Canadian 
Niagara Compajiy is transmitting under the provisions of its tempo- 
rary permit has been barely snfhcient to supply the pressing demands 
of the present use of our combined companies. Except that for the 
fact that on account of unexpected difficulties in construction and in 
crossing certain properties Avith its cables the Canadian company was 
delayed, the entire amount of the present temporary permit already 
would have been used in Buffalo alone, in which case the American 
company would not have been able to supply the present enlarged 
demand on its own lands in the city of Niagara Falls, N. Y. I make 
a concession here which I should not have made. I looked back upon 
my statement before your honor in July and I found I did state our 
application was for 121,000 horsepower. It is printed there. Still, 
I will go on. 

It is true, as stated in the memorandum of the Niagara, Lockport 
and Ontario Company (p. 4), that our original application for 
121,000 horsepower is for an amount which, in the opinion of Cap- 
tain Kutz, exceeds by 500 horsepower the present capacity of the 
plant, which he states (p. 10) '' where designed for the production of 
121,000 horsepower;"" that is, eleven units each of a capacity of 
11,000 horsepower. His deduction of one of the units as a spare, so 
as to put the company on the same basis with the other two Canadian 
companies, disregards the fact that in the case of our company 
reserve will be provided by the Niagara Falls Power Company on 
the American side; and therefore our original application should 
have been not for 120,500 horsepower, but for 121,000 horsepower, 
which, as stated in Captain Kutz's report, is the ultimate full capac- 
ity of our Canadian plant. 

AMien the installation of the electrical machinery above referred 
to is completed, the combined companies, at times of maximum load, 
will require the entire available output of both the American and 
Canadian plants in order to supply the power demands now under 
contract. 

To the separate claims of the tw^o transmission companies, the 
Niagara, Lockport and Ontario Company and tiie Niagara Falls 
Electrical Transmission Company, we consider it unnecessary to 
make separate reply, for their claims are merely in support of their 
several principal companies in Canada. 

With reference to the Niagara Falls Electrical Transmission Com- 
pany, it does not appear that it is legally authorized " both for diver- 
sion and transmission," so as to come within the scope of the second 
section of the act 

That language is a little vague, but it seems to say that your per- 
mits for transmission can be given to companies that are authorized 
only both for diversion and transmission. 

The claim of the Electrical Development Company for equality of 
treatment does not seem to us unreasonable if disposed upon the basis 
of priority of the three companies in the order of their establishment. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 113 

In other words, we would not deny that in fairness each of the 
three companies should be permitted to transmit to the extent of its 
capacity as developed or really in course of bona fide development 
prior to Congressional action. But if it shall become necessary to 
limit the exercise of these rights, then equitably the discrimination 
should be inversely in the order of priority. 

That concludes what I have to say in the way of argument. I have 
one statement to make, and then I will sit down. 

We wish, of course, to preserve this point as to the order of prior- 
ity. We do not wish in any Avay to yield it. We believe in it, and 
Ave respectfully insist upon it ; but we recognize the difficulties of the 
situation. AVe recognize that all of the people have been subjected 
to disappointments, and if this can be done without prejudice to our 
rights pending the formulation of a treaty which may come, we, as 
a modus vivendi, will consent to one equal division between the three ; 
that is, we Avould consent to a diminution of ours to give it to the 
Electrical Development Company on the ground of the division 
among the three, which, I think, all things taken, would be the fair 
thing. 

Secretarj^ Taft. Let me understand you, Mr. Stetson. You mean 
you would take 00.000, or whatever it is? 

Mr. Stetson. Less 7,000. AVe would take 52,500 and throw off 
7,500, and let the other people do that, and add that to the Electrical 
Development Company. We Avill consent to that as a modus vivendi, 
only reserving our right that that remainder should be divided 
equally betAveen the three companies until something further shall 
be done. 

I think Captain Kutz was right in the amounts he gave us, if he 
disregarded priorities. I haA^e no criticism to make of Captain 
Kutz's position. I am merely making this as a concession for the 
purpose of getting this out of your Avay, if we can do so. 

Secretary Taft. Is Mr. Alexander J. Porter a member of the 
New York State .Reservation? 

Mr. Stetson. Yes, sir. 

Secretary Taft. I liaA^e a telegram from him, as follows : 

In order that my personal position may not be misunderstood. I beg to 
advise you that the appearance of Judge Potter at yestei'day's hearing was 
absolutely without my knowledge, and does not convey any opinion from me as 
a commissioner of the State reservation. 

Alexandkr J. Porter. 

I suppose he is rather represented by Mr. Ely than by Judge 
Potter. I suppose that is what it means. 

Mr. Stetson. As Mr. Porter was one of the original incorporators 
of the Niagara Falls PoAver Company, and as Judge Potter has been 
its counsel for most of the time, I do not know what variety of in- 
terest is represented by them. 

statement or gen. FRANCIS v. GREENE, representing the ONTARIO 
POWDER COMPANY OF NIAGARA FALLS. 

Mr. Greene. Mr. Secretary, I do not knoAv Avhether you have seen 
our brief yet. 

Secretary ^aft. No, sir. 

Mr. Greene. I have it here, but I shall not follow it. You may or 
may not knoAv that I used to be an engineer officer when I was young. 
18447—06 8 



114 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft. I know that. 

Mr. Greene. 1 always had a great fondness for maps. Here is a 
set just off the press yesterday. I will hand one to you, Mr. Secre- 
tary, and I will give the other copy to Mr. Stetson. I am very sorry 
there was not a third copy to give to Mr. Macrae, but I will take 
great pleasure in sending him the next one that comes oif the press. 
There will be several thousand of them printed, but I got these out 
in advance. 

Mr. Secretary, again regretting that the illness of our senior coun- 
sel, Mr. Locke, makes it necessary that the Ontario Power Company 
should be represented by a layman, in competition wath the leaders 
of the bar of Philadelphia and New York, representing our rivals 
and competitors, 1 have this to say on behalf of that company: 

At the close of the hearing yesterday you stated that the discussion 
to-day would be on the question of the di\dsion among the respec- 
tive claimants of the amount of poAver which, under the discretion 
vested in you by this act, you may decide to allow by permit to be 
transmitted into the United States, and for the purposes of argu- 
ment Captain Kutz's report was to be taken as the basis for discus- 
sion. 

Fii'st, as to the International Railway Company. — We respectfully 
submit that they are in an entirely ditlerent category from the three 
large power companies, because at the present time they have no 
right to take the power from their power house out of the park for 
transmission into the United States. 

Secretary Taft. Do you mean that depends upon the grant of the 
park commissioners ? 

Mr. Greene. The commission refused to allow it. 

Secretary Taft. On what ground ? 

Mr. Greene. On the ground that their charter does not permit it. 
The commissioners dispute the contention of the railway company in 
regard to their amended charter. 

Their power house is situated within the limits of the Queen Vic- 
toria Niagara Falls Park, which is subject to the jurisdiction of the 
commissioners of that park, and at the present time as well as at the 
time the Burton bill was passed the commissioners have and had 
.refused to grant permission to the International Railway Company 
to take any power from their power house through the park for use 
in the United States. 

"^Miatever rights this company may have under its amended char- 
ter these rights are inchoate and incomplete because the commissioners 
refuse to recognize them. ^^Tien this matter came up nearly three 
years ago and the International Eaihvay Company filed its applica- 
tion for j)ermission to take power out of the park for the use of its 
railways in the United States, we filed a protest against such permis- 
sion being granted to them and supported this by argument of 
counsel. After due consideration, and chiefly because at that time 
there was no restriction or hint of any restriction on the transmission 
of power from Canada into the United States, we withdrew our 
protest and formally notified the International Railway Company 
thereof. Now, with the transmission of power restricted to an 
amount far below the requirements of the three power companies 
the situation is entirely different and we are compelled to enter our 



TRANSMISSION OF POWEB FROM THE NIAGARA RIVER. 115 

protest against any permit being- granted to the International Eail- 
way Company to bring power into the United States. 

Captain Kutz, on page 11 of this report, says as follows: ^' With 
the machinery now installed, 3,(500 electrical horsepower can be gener- 
ated. * * * Its use is limited to the operation and lighting the 
railway, the Canadian division of which now uses 800 to 1,000 horse- 
power. The company claims the right to transmit the balance to 
the United States for use on that portion of its system. This right, 
however, is questioned by the conmiissioners of the Queen Victoria 
Niagara Falls Park, and in their annual report for 1905 the}'^ say 
that they can not see their way clear to approve the plans for the 
transmission of this power through the park." 

Of course if tlie plans are not ap^jroved the railway company 
can do nothing. 

This morning the attorney for the railway company stated that he 
did not know v.diere Captain Kutz got his information. This is a 
surprising statement, because Captain Kutz says distinctly that he 
got it from the official report of the commissioners of the park for 
the year 1905. I may add that in conversation wnth the commission- 
ers Avithin the last few months they have stated to me positively 
that their views in the matter are unchanged, and on the advice of 
their counsel they do not intend to grant the permission sought. 
"Whether they will be overruled by judicial decision is of course a 
matter of conjecture, but the point I wish to make is that at the 
time of the passing of the Burton x\ct, and at the present moment, 
the railway company has no right, clear and undisputed, as the 
power companies have, to take power from their power house 
through the park for use in the United States. 

If you do not agree with these views, and if you accept Captain 
Kutz's recommendation that a portion of the power to be transmitted 
into the United States be reserved until the rights of the railway 
company have been judiciously determined, then I wish to call your 
attention to the statements made by the attorney for the railway com- 
pany this morning and not disputed by Mr. Stetson, that the railway 
company is uoav buying its power in the United States from Mr. Stet- 
son's company; that one of its contracts expires at an early date and 
others at a later date, and that the railway company, if it receives a 
permit to transmit power into the United States, intends to use such 
power solely in replacement of the power now purchased from Mr. 
Stetson's company as the contracts for the same expire. 

Therefore, if the railway company brings any poAver into the 
United States, it sets free an equal amount of powder from ]Mr. Stet- 
son's company, and we ask that if any permission is granted to the 
railway company it shall be determined from the amount of power 
allotted to Mr. Stetson's company. 

Mr. Stetson. That is, if we do not continue to sell it, we must lose 
it. 

Mr. Greene. If they can bring power to supplement power which 
you now have, it should be taken away from you. 

Mr. Stetson. We are not connected Avith them. They are one of our 
customers. 

Mr. Greene. I submit that for your consideration, Mr. Secretary. 
I think it is well founded. 



116 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Second., as to the Electrical Development Company. — The conten- 
tion of this company and its subsidiary company, the Xiag-ara Falls 
Electrical Transportation Company, of which it owns all the stock, 
in the brief submitted November 1, is, in substance, that the three 
companies are on an equality, and '' that there should be equal 
treatment accorded to them all." We can not understand on what 
ground such an argument can be used. As well might it be claimed 
that three locomotives weighing 180 tons, 125 tons, and TlO tons 
should be considered equal in power. The fore bays of the three 
companies are finished: Ours for 180.000 horsepower, the Electrical 
Development Company for 125,000 horsepower, and the Canadian 
Niagara Company for 110,000 horsej^owor. Eact of these fore bays 
probably has a gi'eater capacity than the figures stated by from 10 
to 20 per cent, but their relative proportions are as the figures 
stated, and they were constructed on plans approved in each case by 
the park commissioners with the intention of producing power in 
the relative amounts I have named. Under its franchise the Elec- 
trical Development Company is expressly limited to enough water 
to produce 125,000 horsepower. 

And I mav add that they attempted to get this increased last j^ear. 
The park commissioners agreed to it, but the government of On- 
tario absolutel}^ and positively refused it. 

There is no such limitation in either of the other franchises, but 
the limitation at the time the Burton bill was passed and at the 
present moment is that fixed by the plans hitherto approved, and 
these plans are for 180,000 horsepower, 125,000 horsepower, and 
110,000 horsepower. That was the status at the time the Burton 
bill passed, and I can not see how any argument can be produced to 
sustain the contention that power plants of such relative size should 
be considered as equal in size. 

The Electrical Development Company in their brief have seen fit 
to include newspaper clippings concerning an interview which I had 
with Premier Whitney in Toronto about six weeks ago, and in that 
brief they say : " It is common report in Ontario that the Govern- 
ment is about to close a contract with the Ontario Power Company." 

As to this I hope their information is correct, Mr. Macrae, but 
we have no assurance of it, and it would seem as if with a transmis- 
sion line all built to Toronto, and I believe just about ready to de- 
liver power, or possibly already delivering power in that city, they 
would haA'e a better chance of success in competition for the busi- 
ness in Toronto than ourselves. 

Captain Kutz was evidently of that opinion, for he calls atten- 
tion to the fact that they have expended $2,620,000 for a transmis- 
sion line in Canada, none of which is intended to reach the 
Niagara Eiver for the purpose of crossing into the United States; 
whereas the investment of the other two companies for trans- 
mission lines in Canada, exclusive of what they have spent to 
reach the frontier, is insignificant. On page 11: of his report Captain 
Kutz says : " The Electrical Development Company is preparing 
to sell between 30,000 and 10,000 horsepower in Canada ; " and 
these are definite, distinct plans, based on contracts which are matters 
of public notoriety, under which the Electrical Development Com- 
pany or its allied transmission company has positively engaged to 
sell and deliver power in Toronto for the operation of the entire street 



TRANSMISSION OP POWER FROM THE NIAGARA RIVER. Il7 

raihvay system and the Electric Lighting and Power Company of 
that city. 

To fulfill these contracts it has built at the large expense of 
$2,020,000, above referred to, a transmission line 80 miles or more 
in length from its generating plant on the Niagara Kiver to the 
city of Toronto, and this transmission line is either now delivering 
power or about to deliver it in Toronto. This is a definite, fixed 
engagement, and to that extent, as correctly stated and argued 
by Captain Kutz, the Electrical Development Company has a cer- 
tain market for the sale of powder in Canada, wdiereas the other 
two companies, except for such small amounts as they may have 
sold on the Canadian side in the vicinity of Niagara Falls, have 
no definite engagements, and are simply competing for the business 
against a great handicap of a completed transmission line with 
fixed contracts for the delivery of powder at the extreme end of it. 
It seems to us, therefore, in every respect equitable that as this 
company — the Electrical Development Company — has a fixed and 
definite amount of power sold in Canada, whereas the other com- 
panies have nothing but hopes, prospects, and expectations in Canada, 
the Electrical Development Company should be correspondingly 
restricted in the amount of power wdiich they may transmit into 
the United States. 

On the American side of the ri^^er the situation is entirely different. 
We, the Ontario Powder Company, have spent the greater part of 
$1,000,000 in acquiring a broad right of way and building a trans- 
mission line to the river, and our chief customer, the Niagara, Lock- 
port and Ontario Powder Company, has planted its lines in duplicate 
and in branches throughout a territory 150 miles long and 20 miles 
Avide, at an expense of upward of $4,000,000, and for several months 
past has been delivering power at the extreme end of the line, and 
would have been delivering at various points along the line but for 
the delay in the delivery of electrical apparatus of the customers 
wdiich is now at last being delivered and' installed, and power is to 
be furnished to them at numerous points within the next thirty days. 

To recapitulate, then, as against the Electrical Development Com- 
pany, we claim : 

Firnt. That their plant has a capacity, on approved plans, of only 
two-thirds of our plant. 

Second. That it has definite contracts for the sale of power in 
Canada, which the other companies have not, and that the estimated 
amount of these contracts should be deducted from the amount 
allotted to them for transmission to the United States. 

Third. As to the Canadian Niagara Power Company. — Mr. Stetson 
claims that his company is the pioneer company in the development 
of Niagara poAver. A\''e cheerfully concede this claim. By the brains 
and courage of Mr. Stetson and his associates at a time, ten years 
ago, Avhen the electrical science was far less developed than at present, 
and the hazard of the enterprise correspondingly greater, the utiliza- 
tion of so much of the poAver of Niagara as can be taken Avithout in 
any way whatsoever detracting from its splendor and its glory as a 
scenic spectacle Avas made possible; and I would like to add, if I 
may, that Mr. Stetson and his friends, as well as those associated 
with me in the Ontario Power Company, are the true friends of 
Niagara and can be more safely trusted to preserve its beauty than 



118 TRANSMISSION OF POWER FROM THE NIAGARA RIVER, 

the noisy advocates who occupied so much of your time yesterday 
with misleading statements. But in conceding that Mr. Stetson's 
company was the pioneer company, and that he and his associates 
have immensely benefited mankind by the development of Niagara 
power, we do not concede that they have any priority of claim, or 
of legal right, or of equity, as against the other two companies in the 
matter now pending before you, viz, the relative amounts of power 
to be taken by the respective companies in th^ United States. The 
agreements which he read to you this morning are all matters of 
record and are not disi^uted, but we can not see that they have any 
;.Miring upon the specific question now before you. 

We think that the question — to wit, the equitable division of 
150,000 horsepower between the three companies — is to be decided by 
the relative magnitude of the works on the Canadian side, entirely 
excluding the works on the American side ; by the amounts paid 
by the respective companies to the park commissioners for their 
rights and franchises; by the amounts expended by themselves, their 
affiliated companies, and their customers for transmission lines to 
the Niagara EiA'er, across the Niagara River, and in the State of 
New York. On this basis of comparison the equitable claims of the 
Ontario Power Company are far in excess of those of Mr. Stetson's 
company. To begin with, we produce one-fourth more power from 
an equal amount of water than they do, and while Captain Kutz 
acknoAvledges this fact, he thinks that no attention should be paid 
to it. 

As Mr. Stetson has referred to that, I do not think he has quite 
correctly quoted Captain Kutz. 

Mr. Stetson. I did not say that at all. I said " not accepted by 
him." 

Mr. Greene. Not accepted. 

]\lr. Stetson. That is what I said. 

Mr. Greene. That is the language Captain Kutz uses. I quote 
from his report : 

If the relative investments of tlie three transmission companies associated 
with them for distribution in the United States are alone considered the claims 
of the Nia.ijara, Lock])ort and Ontario Company are unquestionably superior to 
those of the other transmission companies. As the object of the law is to re- 
strict directly or indirectly, the amount of water diverted, it has been sug- 
gested that some weight should attach to the fact that the Ontario Power Com- 
pany makes greater use of the water that it diverts than either of the other com- 
panies. Each of the companies, however, fully utilizes the head incident to its 
geographical location, and any distinction in the matter of permits based on 
relative natural advantages would appear to be unjust. 

Captain Kutz does accept the fact very positively. He states it 
as a fact, and no one can deny it, that we do produce about one-fourth 
more power with an equal amount of water than either of our compet- 
itors. Captain Kutz says it is unjust that the competitors should 
suffer or be discriminated against because one has a relative natural 
advantage over the other. It seems to me that is a ver}^ fair 
ground of discrimination. A^Tien there is not enough to go round, 
you have to cut everybody down, and when the object of the whole 
legislation is to prevent the diversion of water, that company which 
makes the greatest use of water to produce the greatest amount of 
power with a given amount of water should certainly have the ben- 
efit of its natural situation. 



TEANSMISSION OF POWER FEOM THE NIAGAEA RIVER. Ill) 

I think Captain Kutz"s facts are right, but I submit his conehi- 
sions are entirel}^ wrong. 

Secretary Taft. That is, your idea is this — that if I were to reach 
a conchision that these companies were in such relation that really 
the matter ought to be divided one-third to each, the division ought 
to be on the basis of horsepower produced ? 

Mr. Greene. Yes, sir; and in the argument of the Lockport Com- 
pany'. Avhich will follow, and in their brief 

Secretary Taft. That is, to divide one-third to each ? 

Mr. Greene. One-third plus a fourth. We should have a third 
plus a fourth of a third, or a twelfth, and the others should have the 
balance. 

Secretary Taft. That each sliould have the right to transmit as 
much horsepower as it can make out of 3 into 13,000 cubic feet ? 

Mr. Greene. Yes, sir; that is what Ave claim — that we should have 
the full benefit of our natural ad\antage. We talve the water, as seen 
on these various maps, at the ver}^ top of the rapids, and Ave dis- 
charge it below the fulls, with a total head of 202 feet, and an actual 
available head, or what is called the elective head, of 175 feet. 

Mr. Stetson. Mr, Secretary, I Avant to say right there that I think 
that claim is right. I think the distribution should be according to 
the A'olume of Avater used and not according to horsepoAver produced 
by the A^olume. The volume of Avater used is adopted as the basis on 
the American side. PoAver has been adopted on the Canadian side 
because there is no Avay of measuring poAver as it is brought in by the 
volume of Avater that produces it; so by the nature of the circum 
stances it has to be measured in terms of horsepoAver. 

]Mr. Greene. That is exactly the way it hai^pens. 

Mr. Stetson. But I do Avant to be fair about this thing. I do 
think it is fair that it should be measured in terms of water used. 
I do not see any answer to that claim. 

Mr. Greene. ]Mr. Stetson has stated exactly hoAv this thing arose. 
We are singularly fortunate in being located so as to take the water 
where we do take it. The Electrical Development Company takes it 
about lialfAvay doAvn the rapids, and Mr. Stetson's company about 
two-thirds of the Avay doAvn the rapids. They discharge by a tunnel, 
one imder the falls and the other around the bank, and Avith the 
best their engineers can do they can not get an effectiA^e head of much 
over 148 or 150 feet. I think I state it correctly. Mr. Barton will 
correct me if I do not. 

Mr. Barton. It is not quite so much as that. 

Secretary Taft. A\^iere do you measure your horsepower? 

Mr. Greene. We measure it on the wheels doAvn here [indicating 
on map], and our engineers certify to us that Ave get something more 
than the 175 feet effective head that we anticipated. 

Secretary Taft. How much horsepower do you lose in the trans- 
mission of your electricity to Syracuse ? 

Mr. Greene. We lose 8 per cent on a double line and 16 per cent on 
a single line. That is merely a matter of the size of the copper or 
aluminum. Our wires happen to be aluminum. 

I belicA^e there is nothing more to be said on that question of 
economy of the water: but I Avant to get that clearly in your mind, 
for I think Captain Kutz, out of the tenderness of his heart, really 
did not liA^e up to his convictions. He stated the fact and then said. 



120 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

after all, he thonglit it would be an injustice to take advantage of 
the fact; but when there is not enough to go round, Mr. Secretary, 
it is not a question of injustice. Every man has to stand for the last 
thing he can get when we are cut down as we are by this bill. 

Mr. Stetson. I do not know that you have improved the scenic 
beauty of Niagara by putting your power house in the gorge where 
you could get the greatest fall. 

Secretar}^ Taft. I understand he has it so constructed that moss 
can grow on it. 

Mr. Stetson. We are willing that moss shall grow even on the 
wheels. 

Mr. Greene. I will answer that, Mr. Secretary. When we com- 
plained to our engineers that the cost of the works was so far exceed- 
ing their estimates they said, '' We did not calculate in our estimates 
that you were going to spend between $300,000 and $400,000 for art 
galleries." These buildings up here [indicating] are particularly 
designed with a view to the surroundings and not at all as factory 
buildings, and it is a fact that we have spent between $300,000 and 
$400,000 in excess of the business requirements of the buildings in 
order to make them dignified, proper buildings wdth reference to 
all the surrounding country and the surroimding scenery. 

Secondly. From the lith of April, 1900, to the present time we 
have paid to the park commissioners $30,000 per annum, or $195,000 
in ail, as rentals and in consideration of our franchises. The agree- 
ment between the Canadian Niagara Power Company and the park 
commissioners dates from July 15, 1899, and during that time it has 
paid as rental and in consideration of its franchises, the sum of 
$15,000 per annum, or about $105,000. The agreement of the Elec- 
trical Development Company dates from Janiuiry 29, 1903, and since 
that date they have paid at the rate of $15,000 per annum for the 
same purposes, making a total (when the next payment is made) of, 
say, $()0,000. We have thus paid considerably more than the other 
two companies combined by way of rental to the park conmnssioners 
from the date of the respective agreements under which all of us are 
acting. 

In other words, Mr. Secretary, we have paid $195,000, Mr. Stetson's 
companies $105,000, and the Electrical Development Company 
$60,000, by way of rental and in consideration of our franchises. 
This takes no account of the money spent before the construction 
period or before the present contracts Avere entered into with the j^ark 
connnissioners. Prior to that Mr. Stetson's company had been pay- 
ing, I think, $25,000 a year for a period of seven or eight or nine 
years — quite a long period — but that he did to maintain his franchise. 
He did not do any work under it. All three of these companies, as 
soon as they got their agreements with the park commissioners, 
proceeded to build their works as soon as the plans could be drawn, 
and the amounts paid during the construction period since those con- 
tracts were drawn are as I have stated, shoAving that we paid con- 
siderably more than the other two companies combined. We pay 
that because it is uniAersally acknowledged that we have larger 
franchises than the other two companies. 

Hereafter Ave pa}^ a minimum of $30,000 and the other Iaa^o compa- 
nies wall pay a minimum of $15,000 per annmn; and the rate per 
horsepower decreases as the amount of horsepoAver increases for each 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 121 

of us; but at all times for an equal amount of ])Ower we pay more 
than either of the other two companies. 

Secretai-y Taft. AAliat percentage of what you get for your horse- 
power does that amount to? 

Mr, Greene. It starts in at $1.50 a horsepower and it ends up at 50 
cents, always keeping the lower amounts at $1.50. It does not all 
^•educe to 50 cents. The first 20,000 pays $1.50. The next 10,000 pays 
$1. The third 10,000 pays 75 cents, and all after that 50 cents. We 
sell our power to the Lockport company at the international boundary 
at $12.50. 

Secretary Taft. How much do the other companies pay? 

Mr. Greene. They pay the same way. They get the first 10,000 
horsepower for $15,000, and then they get to the $1 rate on the second 
10,000, and the T5-cent rate on the third 10,000, Avhereas we have to get 
up to the fourth 10,000 before we get down to the 75-cent rate. I have 
put all that in figures, and I will give one copy to Mr. Stetson. It 
excludes ahvays the figure you paid before the contract was made. 

Mr. Stetson. You mean before the modification contract was made? 

Mr. Greene. Yes; before the present contract was made. 

Mr. Stetson. Before the contract of 1899 was made, because there 
would not be anything to that contract of 1899 except for the con- 
tract of 1892. 

Mr. Greene. A part of it is the same. Only certain sections of 
our contract of 1892 were changed by the law of 1899. 

Mr. Barton. These figures are all right, T have no doubt, but we 
pay a dollar after our first 10,000. 

Mr. Greene. Yes; that is right. Did I state that Avrong? For 
your first 10.000 you pay $1.50," for the second, $1; for the third, 75 
cents, and all after that 50 cents, whereas we have to pav $1.50 on 
20,000, $1 on the next 10,000, 75 cents on the third 10,000, and we 
do not get down to 50 cents until after we have passed 40,000. 

Secretary Taft. Suppose you were to divide it eqnally — 52,500. 
The difference between you and the other companies woulcl be about 
$10,000, would it not? 

Mr. Greene. Yes. sir; exactly. 

Mr. Stetson. There is a constant of $10,000? 

Mr. Greene. A constant of $10,000. That is it exactly. 

Secretary Taft. But that $10,000 secures to you the possibility of 
using the Welland River, does it? 

Mr. Greene. If you wall ever let us make any use of it. 

Secretary Taft. ^Ye have nothing to do with it, have we ? 

Mr. Greene. We will develop the Welland Kiver very quickly if 
you will let the power come into the United States. 

Secretary Taft. That is what you bought it for? 

Mr. Greene. That is what we bought it for. AVe paid extra be- 
cause it got more rights and franchises than any other company. 

Secretary Taft. Does not that $10,000 represent the difference? 

Mr. Greene. Yes. 

Secretary Taft. Then ought it to be made an argument for the 
difference in the distribution of this horsepower, which relates only 
to that produced by Niagara ? 

Mr. Green^. We think most assuredly it should be if the amount 
to be brought into the United States is to be restricted, wdiereas at 
the time those franchises were granted it Avas not restricted. 



122 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft. This is restricted only to the electricity produced 
by the Niagara River. 

Mr. Greene. The Welland River is a branch of the Niagara. If 
we put that development through, it would draw out of the Niagara. 
There is not enough water in the Welland River. 

Secretary Taft. If you were to let it back into the Niagara above 
the falls, it would not injure the falls? 

Mr. Greene. We would not do that. That would be a waste of 
the water. We would want to get the full head, and that is why the 
first plans were not carried out. The thing would not pay on a 
40-foot head. 

Secretary Taft. Do you not think the fact that you paid $10,000 
for something that is not worth it 

Mr. Greene. It is worth it. 

Secretary Taft. Ought not to influence the distribution? 

Mr. Greene. I deny your premise at once, before you go another 
step. It is Avortli it if we can ever get it into the United States. 

Sir. Stetson. You are going to make it worth it now ? 

Mr. Greene. I am trying to as hard as I can. I quote these fig- 
ures, which I will now read. For instance, for 40,000 horsepower we 
pay $47,500 and each of the other companies pays $37,500 : for 80,000 
horsepower we pay $G7,500, and each of the other companies $57,500 
per annum ; for 120,000 horsepower we will have to pay $87,500, and 
each of the other companies $77,500 per annum. The fact is that 
for a given amount of power, 20,000, 30,000, 50,000, 70,000— what- 
ever it may be — Ave always have to pay more money to the park com- 
missioners than either of the other companies. 

As Mr. Stetson saj^s, there is a constant of $10,000. 

Finally, the most important consideration, however, bearing in 
mind the broad equities of the case and the fact that this bill was 
intended in some measure to protect the capital honestly invested, as 
well as to preserve the beauty of Niagara Falls, the most important 
consideration, I repeat, in determining the amount of power which is 
to be brought into the United States is the amount of money invested 
for that ])m'pose. As between ourselves and Mr. Stetson's companies, 
Captain Kutz finds that we ha^'e expended nearly $1,000,000 in Can- 
ada and $2,785,000 in the United States for such purposes, whereas 
Mr. Stetson's companies have expended $430,000 in Canada and 
$600,000 in the United States for such purposes. 

Those are the figures exactly as given on page 12. 

Secretar}^ Taft. Do you mean four million ? 

Mr. Greene. No, sir. It is Captain Kutz's report, page 12. I say 
four million for us. 

Secretary Taft. Oh, yes; for transmission. 

Mr. Greene. Four million for our transmission and $430,000 plus 
$600,000 by Mr. Stetson's company. 

Our total investment at the time that Captain Kutz's report Avas 
made was $3,785,000, against $1,030,000 by Mr. Stetson's companies. 
We had at that time expended nearly four times as much as he, and 
since that time our expenditures under contracts long since made have 
proceeded at the rate of about $250,000 per month, adding another 
$1,000,000 to the cost, making our relative expenditure nearly five 
times as much as his. It is probable that all of our lines Avill be 
completed under the present projects within the next ninety days, 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 123 

and Mr. Stetson's Avithin the same time, and when they are completed 
our expenditures will be more than five times as much as his. On 
that theory, Mr. Secretary, can you be asked to treat these two com- 
panies equally in the matter of the amount of power that they shall 
be allowed to transmit into the United States? We have spent five 
times as much as they. The lines of our chief customers in New 
York as compared with the lines of Mr. Stetson's companies and his 
customers cover a territory twelve times as great, containing a 
population three times as great, with a probable demand for powder 
at least five times as great. 

These facts and arguments are set forth in our brief of November 
2. I speak now solely from the standpoint of the Ontario Power 
Company. Mr. Cravath will present the claims, which, in many 
respects, are entirely separate and apart from ours, of the Niagara, 
Lockport and Ontario Power Company. We ask, wdth all respect, 
that these briefs may have your more careful consideration before you 
reach a decision on the question now pending before you. 

Mr. Stetson. Mr. Cravath, I have to leave now, and I desire to 
call attention to one thing that may concern us all. 

The reference I had to Captain Kutz's report was section 18, on 
page 10, not section 16 ; but you will observe there is a discrepancy 
in Captain Kutz's report as published. I do not know which way it 
works. In section 18, on page 10, he states, which is accurate, that 
the cost of installation, deducting the value of the franchise, is 
$5,350,000 for our company, and on page 12 he puts it at $4,672,000. 
I do not quite know how to reconcile them. I refer to the tabulated 
statement on page 12. He puts it there as $4,672,000, but on page 10, 
in section 18, the same item apparently, as far as I can understand it, 
is $5,350,000! 

Mr. Greene. May I make a suggestion, Mr. Secretary, which I 
think will enlighten Mr. Stetson? 

Secretary Taft. Certainlj^ 

Mr. Greene. On page 10 he speaks of the cost of the installation, 
$5,350,000. If you add to $4,672,000 the amount on the next line, 
" amount required to complete existing contracts and orders, 
$678,000," you will have the precise amount of $5,350,000. 

Mr. Stetson. That is it. I did not understand it. 

STATEMENT OE PAUL D. CRAVATH, REPRESENTING THE NIAGARA, LOCK- 
PORT AND ONTARIO POWER COMPANY. 

Mr. Cravath. Mr. Secretary, I feel so uncertain of my ability to 
entertain the court at the end of such a long session that I have 
yielded the close to Mr. Johnson. I appear on behalf of the Niagara, 
Lockport and Ontario Power Com]:)any, a New York corporation, 
Avhose sole business is to utilize and distribute in the United States 
jjower generated by General Greene's company, the Ontario Power 
Company. I should say at the outset that this enterprise is in every 
way distinct from the Ontario Power Compan3^ It is not only a 
separate corporation organized under the laws of New York, but a 
majority of its stock is owned by persons having no interest whatever 
in the Ontario Power Company. So we have no possibility of advan- 
tage in the Canadian market. Our success or failure depends entirely 
upon our ability to secure this power under our contract with General 



124 TRANSMISSION OP POWER PROM THE NIAGARA RIVER. 

Greene's company, and market that power in the territory we have 
developed in the United States. 

The factors which are to be considered in distributing this powder 
are very carefully stated in your opinion handed down in July after 
the hearing at Bufi'alo and Niagara Falls. I have quoted an extract 
from that opinion at page 2 of my brief. I shall not take time to 
read to you your own language. Captain Kutz's examination and 
report were based u^^on those factors, and his report was exceedingly 
thorough and painstaking, and vre are very glad to accept Captain 
Kutz's report as furnishing the facts on which your decision is to be 
rendered, supplemented to a certain extent by facts which have de- 
veloped since that report was made. We assume that this report 
should be treated as a master's report would be, and we simply differ 
with certain of Captain Kutz's conclusions. 

The company wdiich I represent, which I shall for brevity call the 
Lockport Company, was organized many years ago under the laws of 
New York, and acquired from the State of New York the right to 
develop a very important power proposition at Lockport, utilizing 
at that point the waters of Niagara River. We very vigorously urged 
the claims of the company, based upon its rights at Lockport, before 
the Rivers and Harbors Committee when the Burton bill was being 
considered ; but the present legislation, of course, puts an end to our 
hopes to develop our power at Lockport, and if that legislation stands, 
as I assume it will, we must dismiss our Lockport plans. So that for 
all practical purposes 

Secretary Taft. How does the water reach Lockport; by canal? 

Mr. Cravath. By a canal. This international railway map will 
show it. Lockport is on the edge of the escarpment. The canal, as 
you know, drops there 50, 60, or 70 feet, and below the lower level 
of the canal there is still a large drop through this 18-mile creek. 
The water was to have been carried across there in a canal about 
T or 8 miles long, and then dropped over this escarpment, with a 
total fall of 210 feet, of which probably 220 feet could have been 
utilized. It could have been a ship canal also — that is, it was large 
enough for ordinary navigation. It was to have been 12 feet deep. 

Secretary Taft. That is the same kind of plan as that of the 
electric company ? 

Mr. (trep:ne. On all fours with it. They take in at Cayuga 
Island, within half a mile, and they go around here [indicating], 
and their plan was to discharge here [indicating]. 

Mr. Cravath. Therefore, for the purpose of this discussion, the 
Lockport Company should simply be considered as a corporation 
whose sole business is the utilization of power generated by General 
Greene's company in Canada. 

A good while before the Burton bill was even discussed the Lock- 
port Company entered into a contract with General Greene's com- 
pany whereby it agreed to take from them a minimum of 60,000 
horsepower at the international boundary line; and whereby it re- 
served the option to take increased power to the amount of 180,000 
horsepower; but 60,000 horsepower it took from them regardless of 
its success in marketing it. 

It then proceeded to build a very extensive transmission line, 
begining at the point on the international boundary line where it 



TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 125 

received the current generated in Canada, and extending about 150 
miles east of Syracuse, taking in Rochester, Tonawanda. Batavia. 
Lockport, and many other intervening cities. It also proceeded at 
once to procure contracts for the future delivery of this power to 
railroads, electric-light companies, manufacturers, and other con- 
sumers within the territory. 

That work had progressed far when the Burton bill was passed. 
The company was irrevocably committed to the completion of that 
work. It was precisely in the position, to use your illustration, of a 
man who had carried his house up to the roof beams, and of course 
was compelled to complete the structure or lose it. I think the good 
faith of the investment we have made is not to-day questioned by 
anyone. Caj^tain Kutz expressly finds in his report that all of these 
companies have made their investments in good faith and were com- 
mitted to the investment which has been made before the enactment 
of the Burton bill : indeed, before the agitation which resulted in that 
legislation. 

We have a right of way which cost almost one and a quarter million 
dollars. We liaA^e erected 400 miles of transmission lines, the longest 
line, as I have pointed out, being 150 miles long. We had, at the time 
of Captain Kutz's investigation, invested in our transmission lines 
alone almost $3,000,000, and that investment, at the close of this year, 
will amount to $4,000,000. That investment is entirely in completing 
the jjlans originally made. We have not enlarged our plans. For 
instance, our first contract for power, taken before the Burton bill was 
introduced, was taken in Syracuse, at the eastern terminus of our ter- 
ritory, and among the first parcels of rights of way acquired were 
parcels upon the line between Rochester and Syracuse; so that our 
expenditure has been entirely in completing the plans to which we 
were irrevocably committed before the Burton bill was introduced. 

You will see from the discussion which has taken place, Mr. Secre- 
tary, the radical diiference in the scope of the plans of these three sets 
of corporations and the territory which they are intended ])rimarily 
to serve. The Electrical DevelojDment Company is primarily a Cana- 
dian company. Its first transmission line was built to Toronto. Its 
first contracts are in that city ; and Captain Kutz reports that it has 
business in sight in Toronto of between thirty and forty thousand 
horsepower. It intends, of course, to transmit a portion of its current 
into the I'^nited States, but its primary function is to develop the 
Canadian business. 

Both of Mr. Stetson's companies have thus far confined their opera- 
tions to Niagara Falls, Tonawanda, Buffalo, and the adjacent terri- 
tory, and it may be fairly assumed, in view of what Mr. Stetson has 
said regarding the prospects for the sale of power within the terri- 
tory, that now that the amount of power is limited they will not carry 
their operations beyond this limited territory, all of which I think is 
within 30 miles of Niagara Falls. 

We have avoided Buffalo, which was well supplied by Mr. Stet- 
son's companies, simply carrying our lines to its suburbs to reach 
certain manufacturing plants. We have chosen to go into what is 
called the long transmission side of the problem and have developed 
this territory 150 miles long, with a width of at least 20 miles, and 
capable of indefinite expansion sidewise. This territory, even with 



126 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

the width of 20 miles, iiichiding Eochester and exchiding the popula- 
tion of Buffalo and Niagara Falls, embraces 1,000,000 people, and in- 
cluding those cities, 1,500,000 j)eople. 

Our lines supply the only means on that territory east of Buffalo 
for the utilization of the power generated at Niagara Falls. A^^iile 
Mr. Stetson has been a pioneer in the generation of power, we have 
been the pioneer in the long-distance transmission of this power in 
the State of New York, and, as I say, we have reached the most 
important cities in western and northern New York, next to Buffalo, 
including Eochester and Sj^racuse. 

As you pointed out in your opinion, rendered last July, a very 
important consideration is the relative investment of the three sets of 
companies in their plants. On page 5 of my brief you will find a 
table showing the relative investments, generating capacity, and ulti- 
mate capacity of the three plants on the Canadian side. Without 
stopping to read the figures, I will call your attention to the per- 
centages. 

Of the aggregate investment on the Canadian side, as reported 
by Captain Kutz, we have made 35.9 per cent. Of the aggregate 
generating capacity of the three plants on the Canadian side, we 
have 36.6 per cent. Of the aggregate ultimate capacity of the 
three plants measured by the capacity of the intakes, and also by the 
extent of our rights under our grants from Ontario, we have 43.4 per 
cent. This is on the "Canadian side alone. 

Now, turning to page 10 of my brief, we have a table showing the 
investments of the power companies and transmission compaiiies con- 
solidated. From that it appears — again taking Captain Kutz's fig- 
ures — that the aggregate investment of the three sets of applicants in 
power plants and transmission lines in the United States is 
$17,945,000, and of that investment we have made 44.'2 per cent. 

Since this report was made, the further expenditures by the three 
applicants bring the total investment, as it appears on page 11 — and 
here I supplement Captain Kutz's report by facts of later occur- 
rence — of the three enterprises up to $20,192,000, of which our pro- 
portion is 46.2 per cent. 

But taking the situation as it stood at the time of Captain Kutz's 
report, we submit that upon the scope of relative investment alone we 
are entitled to 44.2 per cent of the water diverted by the three sets of 
enterprises. I use the expression " water diverted " advisedly, be- 
cause of the distinction between water diverted and power diverted 
at the boundary line. 

As General iareene has pointed out and as Mr. Stetson has also 
conceded, our plant produces approximately one-quarter more power 
per cubic foot of water than the other plants, so we think we should 
have based on our investment alone 55.2 per cent of the power de- 
livered at the international boundary line. That is to say, of the 
. 10,400 cubic feet of water to be diverted, according to Captain Kutz, 
to produce 160,000 horsepower we should have 55.2 per cent, which 
is 5,740 cubic feet. That is our share of the water, and if we had our 
share of the water we would produce at the international boundary 
line 87,800 horsepower. 

Let me say at this point what I meant to have said at the outset — 
that the amounts of power applied for furnish no criterion, because 
the applicants had proceeded upon different theories. For instance, 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 127 

after a careful calculation of our requirements and contracts and giv- 
ing due regard to the fair requirements of other applicants Ave have 
decided that 90,000 horsepower was our fair share. The Electrical 
Development Company has simpl^^ applied for half of its generating 
capacity, and Mr. Stetson's company has applied for the entire gen- 
erating capacity of its plant. If we had made application on the 
same theory as the other companies, we would have applied for 
180,000 horsepower, which Captain Kutz reports is our ultimate gen- 
erating capacity and which is the capacity of our transmission lines 
in the United States. 

Quite apart from the considerations based upon our relative invest- 
ments, we wish to submit our claims to your consideration based 
upon the contracts which the Lockport company has made and the 
business which it must do in order to make its investments profitable. 

On the subject of contracts Captain Kutz makes the following- 
report as to our company, which will be found on page 8 of his 
rej^ort : 

The Ninsarn. Lockjtort and Ontario Power Company has actually executed 
contracts which call for delivery within the near future of G.OOO horsepower, 
with provisiou for fixed increases at intervals varying from three months to 
three years, so that at the expiration of that time they will have a firm contract 
with their present customers for 14.240 horsepower, with options on the part of 
the purchasers which give them the right to increase the amount to 70,000 
horsepower. 

Let me say that in all our contracts our customers fix a very low 
minimum, and the maximum is supposed to be not far from the actual 
requirements, so that in almost every case the amount of current a 
customer has the right to have under the contract is, in our judgment, 
a fair measure of the current which will actually be taken. 

He proceeds : 

In addition the compajiy claims to have contracts verballj^ closed for 1.3,000 
additional firm horsepower and negotiations pending for 2.5,000 horsepower, 
making a total of 52.000 horsepower, for which they hope to have a market in 
the near future. The optional amounts named in these contracts and negotia- 
tions aggregate 100,000 horsepower. At the time of the examination this com- 
pany was actually transmitting to the United States 700 horsepower. 

These verbal contracts and pending negotiations to which Captain 
Kutz refers have since ripened, many of them, into contracts. So 
that we have to-day contracts which call for a minimum of 31,000 
horsepower, a maximum of 110,000 horsepower, and General Greene 
and the officers of the Lockport company estimate that those con- 
tracts will require in the verj' near future 90,000 horsepower, so that 
I will say with confidence that 90,000 horsepower are necessary to 
meet the requirements of our existing definitely closed contracts. 

In addition to that, we have pending negotiations for a much 
greater amount of power, and I am assured that if we could get all 
the power we could transmit we could within three years find cus- 
tomers for at least 120,000 horsepower and perhaps for 150,000. So 
in saying we need 90,000 horsepower to meet the requirements of our 
existing contracts I pay no attention to the business in sight which 
has not been definitely closed. 

The reason we have taken contracts for 90,000 horsepower, the rea- 
son we have aliowed negotiations which have been pending (and 
which were pending in almost every case before the Burton bill was 
passed, but were not closed because our plant was not then complete 



128 TKANSMISSION OF POWER FROM THE NIAGARA RIVER. 

and we were not in a position to actually deliver power) to ripen into 
contracts for 90,000 horsepower is because the sale of 90,000 is abso- 
lutely essential to make our investment profitable. By our invest- 
ment I mean the investment of the Lockport Company. We have 
invested upwards of $1,000,000, or we will have invested by the end 
of this year upward of $4,000,000, in our plant, and a further invest- 
ment will be required to round out the transmission line for the de- 
livery of that 90,000 horsejDower. Unless we can sell 90,000 horse- 
power, or rather get it to be sold, we can not make a fair return upon 
our investment. Sixty thousand horsepower is absolutely required to 
insure interest upon our bonds. 

I should go back and say that upward of $'2,000,000 of our bonds 
were sold before the Burton bill was passed and had passed into the 
hands of complete strangers to our enterprise. The sale of additional 
bonds required to reimburse the owners of this enterprise for a por- 
tion of their expenditures is dependent upon our having at least 
60,000 horsepowei". 

But if our supply is limited to 60,000 horsepower, while we might 
earn the interest upon our bonds, and will do so, I believe, we will 
get no return for the capital not represented by bonds, and there will 
be no return to these gentlemen who have invested a very large 
amount of time and a very large amount of hard work in this enter- 
prise, which has not only turned out to be a hazardous one, but an 
extra hazardous one. 

Now, about the other companies. Of course I can not folloAv Mr. 
Stetson into the discussion which he made to-day and the discussion 
which we find in his reply brief, filed yesterday, regarding the con- 
tracts of his company and its prospects for business, because we 
have no information regarding his company formally before us ex- 
cept the information contained in Captain Kutz's report. 

Mr. Lovelace. They were filed in the Department here originally. 

Mr. Cravath. We have never seen them. On page 11 of Captain 
Kutz's report you will find what he says regarding the contracts of 
Mr. Stetson's company, as follows: 

At the present time tliere is no definite contract covering the sale of the power 
intended for delivery in the United States. This is explained by the intimate 
financial relations existing between the Niagara Falls Power Company and the 
Canadian Niagara Power Company. At the time of the examination it was 
actually transmitting to the United States about 1G,000 horsepower, but the 
combined load sheet of the two companies shows that the maximum amount 
thus far delivered to customers is about 85,000 electrical horsepower. 

There is no doubt that there was excluded the 16,000 hydraulic 
horsepower which was delivered to one of the customers, and there 
is no doubt that the Niagara Power Company have contracts in ex- 
cess of that amount, but we have no evidence to indicate that the 
contracts of the Niagara power companies in excess of those which 
can be filled by the American plant at all approach the contract for 
90,000 horsepower which we have entered into in our territory. 

As to the Electrical Development Company, Captain Kutz finds, 
on pages 9 and 10 of his report, as follows : 

The Niagara Falls Electrical Transmission Company has not executed any 
contracts for the delivery of power, but expects that its allied interests will 
require 17,500 horsepower. This expectation is based on the use by the 
Niagara Falls Gas and Electric Light Company of 3,000 horsepower, though 
the amount now distributed by this company is about one hundred horsepower. 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 129 

It also includes an estimate of 4,000 horsepower for the Buffalo, Lockport and 
Rochester Railway Company. This amount is based on a double-track road, 
while the contract for the construction of the road calls for only a single track 
at the present time. The company also submitted confidentially a list of cor- 
porations who had made inquiries with reference to the purchase of power from 
the Niagara Falls Electrical Transmission Company, together with the amount 
of power which they would probably require. This list aggregates 141,000 horse- 
power. It is needless to say that these inquiries involve no obligation on the 
part of either party. 

Elsewhere in his report Captain Kntz, in substance, refers to the 
arrangements of the P^lectrical Development Company for the mar- 
keting of its power in the United States in an embryonic state. 

The table on page 10 of our brief shows that their expenditures for 
transmission to the United States have been exceedinslv small, onlv 
$246,000 as against almost $3,000,000 in our case at "that time, and 
only $000,000 in the case of the Canadian Niagara Power Company. 

So we submit that not only because of our nuich greater relative 
investments, but because of our commitment to tliese contracts for 
the delivery of power to a much greater amount than either of the 
other companies, we are entitled to substantially more than a third 
of the power, and we urge that we are entitled to 00,000 horsepower, 
which is the minimum amount required to enable us to perform our 
contracts and to earn even a moderate return upon our investments. 

I think we may fairly urge in support of our own aj:)plication the 
needs of the people who live in our territory. As I have already 
pointed out, our lines serve a population of about a million people, 
and many important cities, including Syracuse and Eochester, while 
the iDopulation of the territory now being served by the Niagara Falls 
power companies is about 500,000, including Buffalo, Niagara Falls, 
and Lockport. That territory — that is, the Buffalo ancl Niagara 
Falls territory — is assured under existing conditions of at least 
200,000 horsepower. They will get 1(50,000 horsepower from the two 
American developments, and it is fair to say they will have an 
opportunity of getting in one way and another at least 40.000 horse- 
power from Mr. Stetson's companies and perhaps from the Electrical 
Development Company. Therefore that territory of 500,000 inhabit- 
ants is sure of 200.000 horsepower of Niagara power. 

We submit that this much more extensive territory, having a popu- 
lation of a million inhabitants, which is served by our transmission 
system, is entitled to at least 00,000 horsepower out of this total. 
That is one-quarter of the amount of horsepower per inhabitant that 
is insured for the Niagara Falls-Lockport district. 

Mr. Ely and others have pointed out the prosperity, the distinct 
stimulus to manufacturing Avhich inevitably follows the introduction 
of ciieap Niagara power. May we not fairly urge the claims of the 
million inhabitants of our territorj^ to their fair share of this enor- 
mous stimulus to activit}^? 

Secretary Taft. You have not taken up or considered in your brief, 
have you, the claim to priority? 

Mr, Cravath. I was just about to speak of that, Mr. Secretary. 

So far as I can see. the only foundation and logic of Mr. Stetson's 
argument, based on the undoubted fact that his American company 
was the pioneer, the patriarch, of the power companies, and that his 
Canadian company received the first grant in Canada — at least, a 

18447—06 9 



130 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

grant preceding that of the Electrical Development Company and of 
our own company — is the analogy to the position of junior grantees 
of the water from a stream having a limited amount of power with 
respect to their senior grantee. I assume that if the owner of the 
stream grants to A the power to take a thousand horsepower from 
that stream, and later grants to B and C the right to take horsepower 
from that stream, the rights of B and C may be subordinate to the 
rights of A. 

It seems to me that analogy does not apply to our present situation, 
because when these grants were made for our purposes, for the pur- 
poses of these power companies, the waters of Niagara Falls were as 
inexhaustible as the air, and the reservation in respect to Mr. Stet- 
son's company in the grant to our company and the reservations in 
the grant to the Electrical Development Company in respect to both 
of the other companies were not with a view to dividing up a limited 
amount of water. They were Avith the purpose of protecting the 
Canadian government primarily, and incidentally the prior grantees 
against interference with their physical property, their tunnels, their 
forebays, their canals, and their power houses. There is no sugges- 
tion in any of these gromids that there was a limited amount of 
water in respect of which tlie prior rights of any grantee were being 
recognized. 

It seems to me the situation would be precisely the same as it would 
have been if, instead of utilizing the waters of Niagara, these power 
companies had utilized air. Or, to use a better illustration, had 
utilized what assumed to be cheap coal and cheap labor to be found 
in Canada. Assume that they had done that, and after three plants 
utilizing that cheap coal and cheap labor had been installed the 
Congress of the United States saw fit to jjrohibit the importation into 
the United States of any power generated by Canadian coal, except 
160,000 horsepoAver generated by the three existing plants, and you 
had been asked to distribute that 160,000 horsepower among the three 
applicants. Surely the fact that one corporation happened to be in 
business first or happened to be chartered first or happened to get its 
right to use coal first would not place it in a better j^osition. The sole 
test would be the test which you are applying here : Did those com- 
panies make their investments in good faith before the changed con- 
ditions came which resulted from the enactment of the Burton law? 
If they did, I submit they would all be coordinate so far as the ques- 
tion of priority is concerned; and I submit our position is just the 
same as it would have been if we had been dealing with cheap coal 
and cheap labor instead of the cheap power of Niagara Falls. 

Secretary Taft. Would you concede that if the cataclysm had taken 
place that Mr. Stetson supposes, so that all the water had been re- 
duced to only enough to run his plant, he would be entitled to his 
grant, to shut you out? 

Mr. Cravath. I have had no occasion to consider that question, but 
I assume Mr. Stetson is right when he says that in the case of a 
limited supply of water priorities of rights may govern. 

Secretary Taft. Would you continue the analogy to a limited de- 
mand for that which is made by the water ? 

Mr. Cravath. I say, assuming that to be so, it does not apply to this 
case, where the supply of water is unlimited and where the embargo 
results not from a limited supply of water, not from any action by 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 131 

the Government Avliich granted the right, but by the action of a for- 
eign government in limiting the importation of the power. 

Secretary Taft. You do not think the analogy continues to the 
difficulty of marketing? 

Mr. Cravath. No. 

Mr. Greene. If the cataclysm took place, Mr. Secretary, would 
the fact that we are higher up the stream liaA'e any bearing? 

Secretary Taft. I have only examined it hastily, but I should 
judge that as you are all within the park, the limitation which makes 
you the junior to his grant may exclude you from the use of any 
water that would prevent his using the water. 

Mr. Greene. We being higher up, do you think that would have 
no application? 

Secretary Taft. I do not think it would make any difference. It 
says expressly that you are to do nothing which will prevent his use 
of the water first granted. 

Mr. Cravath. And Ave have done nothing. We have not passed 
the Burton bill. 

Secretary Taft. I guess we will acquit you of that. 

Mr. Cravath. So we saj^, whatever the law may be as to the distri- 
bution between two or more grantees of an amount of water not 
sufficient for all. the analogy does not apply to our case where the 
supply of water is unlimited and where the difficulty is entirely 
created by what is in effect an embargo levied by a foreign govern- 
ment. 

Mr. Stetson also points out in his brief that the effect of the Bu.rton 
bill is to prevent his American company carrying out its original 
plan of building a new canal and building a second power house of the 
same capacity as the first. It seems to me the Canadian situation 
and the American situation must be considered as entirel}' distinct, 
that the fact that the stock of the Canadian Niagara Falls Power Com- 
pany is owned by the American Power Company has no more bearing 
upon this discussion than the fact that the stock of the Electrical 
Development Company is owned by the Canadian citizens; but if 
there were force in Mr. Stetson's argument that because he has suf- 
fered on the American side he is entitled to consideration, I should 
argue with great vigor that we have suffered very much more than 
he has, in that we have completely lost the opportunity of making 
any development at Lockport, where we had originally hoped to de- 
velop a plant of 200,000 horsepower. But I do not press that, because 
it does not seem to me to be a sound argument. 

Finally, Mr. Secretary, it seems to me that in considering our rela- 
tive investments, in considering our relative share of the aggregate 
investment in power plant and transmission line, considering the 
enormous superiority of our investment in transmission lines on the 
American side, considering the contracts which we have been com- 
pelled to enter into to protect that investment, considering the neces- 
sity of having at least 00,000 horsepower to protect those contracts 
and make our investment profitable, and considering the fair claims 
of our territory, comprising a million inhabitants, we shall reallv be 
less favorably situated with 90,000 horsepower than the other two 
applicants if they divided the remaining 70,000 horsepower between 
them. 



132 TEANSMISSTON OF POWER FEOM THE NIAGAEA EIVEE, 

Secretary Taft. I think it is only fair to the counsel for the four 
interests here that a letter which Captain Kutz has written after hav- 
ing examined the brief and references should be submitted to counsel 
with a view to their examination of the points he makes. I am not 
familiar with it at all, but it takes up certain statements with respect 
to the character of the contracts and calls attention to other facts that 
he thinks ought to be taken into consideration in connection with 
them. I will have it printed and sent to the various interests. 

Mr. Cravath. I just want to make one suggestion more. I think it 
may be fairly inferred that the great part of our territory will never 
have another transmission line carrying power from Niagara Falls. 
That is, the amount of power which will be carried there will be 
limited. As I have pointed out, we must have 90,000 horsepower to 
make our lines pay. So in all human probability no other company 
with Niagara Falls and Buffalo near by would feel justified in carry- 
ing a transmission line so far away as Syracuse for the sake of mar- 
keting the small amount of power, comparatively, which would be 
available to another company. So the chances are that the territorj^ 
which we serve will have to depend on us and our lines in order to 
receive its share of the Niagara Falls power. 

state:mext of john g. johnsox, representing the electrical 
development c03ipany. 

Mr. Johnson. Mr. Secretary, Captain Kutz has filed a report 
which will be thoroughly helpful to you in your consideration of this 
subject, not only because of the information it gives and the settle- 
ment of contradictory statements, but also because, as has been stated 
to me by my client, he has in a spirit of the utmost fairness endeav- 
ored to get from each company everything in its power to give favor- 
ing the reasons why it should receive special consideration at your 
hands. 

The result of this report is to give to every company the full benefit, 
in your consideration, of everything which, after investigation, ought 
to be by you regarded. 

I quarrel with his report, not because of any facts he states, but 
because of two points of view taken by him which I deem erroneous. 

The result of the first point is to make necessary a squeeze upon 
the companies and a dispute over the division of the very meager 
power which he suggests should be allowed presently to be imported, 
viz, 160,000 horsepower. 

Secretary Taft. That is under his construction of the statute? 

Mr. Johnson. Under his construction of the statute, which, of 
course, is open to review. AVith your legel experience you will, I am 
sure, feel able to deal with all matters of interpretation inde- 
pendently. 

The statute certainly conveys the idea, as far as Congress in a 
statute can express an idea, that 100,000 horsepower can, with en- 
tire safety and propriety, be delivered. This idea resulted from the 
information its committee gathered, which, as you know, held in- 
numerable hearings and heard a great deal of testimony. Congress 
presumed that at least 160,000 horsepower could, with entire safety 
and propriety, be permitted to be generated. 



TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 138 

AVliilst in the act it is said that you are not compelled to accept 
its belief of what should be the minimum allowance and are given 
the right to say, if you shall so find, that there may be a greater or a 
less allowance, the act throws upon those contesting the minimum 
allowance the burden of proof. Instead of that burden having been 
assumed by the objectors, you have been advised by the representa- 
tives of the Government in the Waterways Commission and otherwise 
not only that the minimum allowance is safe, but that you may go 
much further. 

You start, therefore, with a presumption arising out of what has 
been done by Congress, one which not only has not been in the slight- 
est degree overcome by adverse proof, but has been more than cor- 
roborated. 

Captain Kutz'S idea, that for the present you should only allow the 
minimum of 160,000 horsepower, is not warranted by what appears in 
the act itself. Mr. Stetson said to you yesterday that as over 150.000 
horsepower had been, for ever so long, taken from the American 
side with no perceptible ill effect, and as the water supply on the 
American side is only one-eighth that on the Canadian side, very 
much more than 100,000 horsepower has been demonstrated to be a 
safe taking on the Canadian side. 

This is a common-sense view of the situation. There has been a 
demonstration that over 1,000,000 horsepower can be taken from the 
Canadian water without injury to the falls. 

Secretary Taft. I should think, Mr. Johnson, that the evidence of 
the engineers would indicate that that which was taken on the Amer- 
ican side, in its diminution of water, was not confined to the water 
on the American side. I mean that the Niagara Falls company 
takes the water so high up that it affects not only the flow on the 
American side, but also the flow on the British side; and if that be 
true, then you could hardly say that that indicated what the effect 
on the American side was. 

Mr. JoHNSOK. If the facts are so, undoubtedly the inference is so. 
I did not gather, however, that they thought the taking by Mr. Stet- 
son's company, which is altogether on the American side, drew from 
the water running down on the Canadian side. 

Secretary Taft. Yes ; I think the geological professor who was here 
yesterday rather sustained that view. 

Mr. Johnson. In a modified way. That is a fact with which you 
are more familiar than I am. Undoubtedly, hoAvever, this fact exists. 
There is an enormous preponderance of water on the other side, and 
if it is safe to take 150,000 horsepower on the American side, even if 
there is some draft upon Canadian water, it is not necessary that the 
taking upon the Canadian side should be kept as low as 100,000. 
The figures, as you will recall, which were expressed in cubic feet, 
which must be multiplied roughly by twelve, of the Waterways Com- 
mission are 216,000 on our side and 432,000 on the other. 

It would seem to me, under all circumstances before you, under the 
discretion granted to you, there is no necessity at the present time 
that you shall subject the companies to that squeeze which has made 
this unamiable controversy between them necessary. 

But I will argue this case upon the theory that you are going to 
follow the 



134 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

Secretary Taft. I did not mean to foreclose the discussion of that 
point, Mr. Johnson. 

Mr. JoiixsoN. Upon that subject I have said all I want to say. 

Secretary Taft. I meant that it would be convenient to have some 
basis of discussion, and therefore I mentioned Captain Kutz's reports. 

Mr. JoHX'SON. I have said all I meant to say on that subject. You 
had the poetical and sentimental part of it yesterday. One day of 
that is enough for any ordinary digestion. I pass now to the ques- 
tion I am here to discuss. 

Before passing to that question, however, I must express the diffi- 
culty I have in separating these Siamese twins. Here is the Ontario 
company I pointing to its representative. General Greene], with 
Canadian grants, and here [pointing to Mr. Cravath] is my distin- 
guished friend who represents, so he tells you, an American company 
solely ; but at times in the heat of argument the nice distinctions be- 
tween these two companies are so fused that we could hardly tell 
which com])an.y he was really representing. Let us cut them apart, 
even though the separation must be with a ruthless knife, and, dis- 
severed, let each stand alone, the Canadian-Ontario company rep- 
resented by the gallant general, and the American-Ontario company 
represented by one of the soldiers of our profession. 

How, then, does Mr. Cravath's company stand in an appeal to you ? 
Here are 160,000 horsepower to be api^ortioned by you, sitting as a 
chancellor — an unusual function for a Secretary of War 

Secretary Taft. No; not under the present method of conducting 
the War Department. [Laughter.] 

Mr. Johnson. To those who do not know, at least, an unusual 
function. You are to say to three companies, all of which have 
Canadian grants to take water in generating power in an aggregate 
greatly in excess of 160,000 horsepower, how that power shall be 
apportioned. 

You must do that because the United States Government, in the 
exercise of the only function which enables it to prescribe any pro- 
hibition upon the Canadian w^ater taking — in the exercise of its 
power to levy an import duty or to forbid importation — says : " We 
will not permit the importation into America of more than 160,000 
horsepower."" An American company which had prepared itself in 
America to transmit electric power which it expected to receive from 
Canada, because it will not be able to receive such power presents 
itself to you, demanding your consideration in the matter of this 
ap])ortionment. 

Pray tell me upon what foundation an American company can 
rest a right to say because three generators of power on the other 
side have been forbidden to export into the United States all the 
power they will generate that it is entitled to receive compensation 
because of the denial to the generating companies of the right to 
export what, at great expense, they had prepared themselves to 
manufacture? 

As well might every other user in America of electrical power 
demand consideration because of its inability to get what it had 
hoped to receive if the American Government had not exercised its 
right, adversely to its subjects, to allow importation. The only per- 
sons who have any standing before you — I leave out the inter- 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 135 

national — are the three companies which have been anthorizecl by 
the Dominion of Canada to generate power by means of the use of 
the water of the Niagara Kiver. 

The grants in Canada, which are, and necessarily must be, the only 
grants of the use of Canadian water, are rendered comparatively 
valueless by reason of the forbidding of exportation. The question 
you must determine in this case, as Captain Kutz very intelligently 
puts it. although in an important respect I differ from him, is, what 
should be your point of view in determining the equitable rights of 
people, who, having made outlays of their money, are unable, by 
reason of the action of our Government, to derive more than a 
restricted advantage theref i"om ? 

Those companies, outside of Canada, located in America, who ex- 
pected to get something that will not reach them, because of the 
action of their oAvn Government, are out of the range of considera- 
tion. We should deal with Canada in a spirit of reciprocity. We 
exclude her grantees, after an acquiescence on our part in the past, in 
a way that works an equitable injury and deprives her of benefit 
which would result from the exercise of her jjower, excepting to a 
limited extent. May she not expect, especially if we wish her to 
make a treaty in which our citizens are greatly interested, that you 
will not compensate Americans at the expense of those who have 
made outlays on the faith of her grants ? 

Now, how do these companies stand? All have Canadian grants. 
Two of them are companies composed of Americans, financiered 
with American capital, and run solely by Americans. The other of 
them — they are all necessarily Canadian companies in the naturali- 
zation label put upon them — is a Canadian company through and 
through. It is Canadian in the personnel of its stockholders; in 
the cai^ital put into it; in the financiering of its bonds, issued in 
the course of its operations. 

These three companies occupy positions which, thanks to the 
intelligent effort of Captain Kutz. you are able to understand with- 
out being compelled to sift that endless maze of contradictions with 
which you were met on that hot day of last July, when you were at 
Niagara Falls. All of them were authorized to generate a desig- 
nated amount of poAver; but, at the time the cyclonic storm circled 
around and struck them, they were in a situation, because of the 
outlays they had made, and the manner in which the same had been 
made, which furnishes the proper basis for your consideration in 
equitably compensating them for the injury which has been done 
to them. 

That extraordinarily inflated company — the Ontario — inflated in its 
pretensions and exaggerated in its statements, was authorized to 
generate 100,000 horsepower. It says that it Avent about the work 
of securing and disposing of power to that extent, through a contract 
I have never seen — possibly not to its disadvantage — because there 
are such things as contracts with strings. It entered into a con- 
tract it says, with an American company, entirely independent in 
its personnel, before it was able to deliver even a mule, or a pony 
power, much less a horsepower, that bound it — perhaps — in the 
future to deliver 100,000 horsepower. It seems to have been easier 
for it to make contracts with affiliated companies to deliver power 



13(3 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

than to dig, excavate, and construct what would be necessary to 
generate such power. 

. To enable it to furnish 160,000 horsepower it would be necessary 
for it to construct three tubes, into which to put the requisite units. 
It had constructed no more than one of these tubes, and into one of 
these, crowd as it may, it can not put more than seyen units. So 
far as regards the construction of the two other tubes, into which 
it would be necessary to put fourteen other units, making up the 
twenty-one necessary for the generation of 100,000 horsepower, it 
will be required to spend additionally $0,500,000. 

Although the citizens of America are now^ clamoring ( ? ) for 
90,000 horsepower, and can hardly w^ait until they get it, the Ontario 
compan}^ will not be in a position at the present time, when all the 
work which it has commenced is completed, to supply more than a 
limited part of the permitted horsepower. When it completes the 
tube it is now constructing and when all the units are crowded into it 
that it will hold, the company will be able to deliA^er not more than 
66,000 horsepower. In order to do more than that it must go down 
into its pocket, or, in these modern days of promotion, what is better, 
dowm into the pockets of the public, and must try to realize out of 
the depths thereof $6,500,000 more. The probabilities of it being 
able to raise the same, under the present circumstances, are hardly 
worth considering. 

Three corporations come to you, wdio say : '' ^Ve have been relying 
upon grants by the Canadian government, we have been making 
outlays upon their faith, and we w^ant to receive out of that which 
you can allow — our only solatum for the injury done to us — w^hat 
is our fair share." - 1 

The Ontario company has spent almost all of its money in put- 
ting itself into shape, utilizing nearly all its outlays to have one 
tube wdth the units therein which will enable it to generate 66,000 
horsepow er. That one tube will doubtless be completed. 

Its outlay in and about such completion — I take the figures from 
Captain Kutz's report — will be $5,877,000. 

Mr. Stetson's company has qualified itself to produce 55,000 horse- 
power — five units of 11,000 horsepower each. Though not quite 
completed to that extent, it will undoubtedly so complete. The elec- 
tric company I represent has qualified itself to produce 50,000 horse- 
power, and it W' ill produce that poATer upon completion of the con- 
tracts made in the past. 

Therefore, when all these outlays are completed, as they must be 
completed, there will have been spent by the Ontario company the 
amount I have stated, viz, $5,877,000. and by our company $6,250,000. 

If, therefore, there w^as nothing more than this, after the three 
companies had finished the outlaj^s and expenditures necessary to 
utilize the construction begun — because there can be nothing more 
apt than your own simile of the necessity of putting a roof upon a 
house partly constructed — if they would have, respectively, the abil- 
ity to supply 66,000, 50,000, and 55,000 horsepower, a fair apportion- 
ment amongst them would be that which would take into considera- 
tion the horsepower each had qualified itself to deliver. 

But, unfortunately for us and fortunately for the Ontario com- 
l^any, the situation is one which requires us to take into considera- 



TKANSMTSSIOF OF POWER FROM THE NIAGARA RIVER. 137 

tion more than the horsepower capacity. The Ontario company, 
with the exception of some small outlay in the fore bays, has con- 
fined its expenditures — I. do not mean absolutely, but practically, in 
view of what Captain Kutz" reports — upon the tube w^hich it will 
complete, leaving the second and third tubes practically to be com- 
menced under future exigencies. 

Both Mr. Stetson's company and my company made a very large 
amount of outlays with a view to a completion of their work as a 
whole to the full capacity permitted. To qualify each to produce 
but 50,000 and 55,000 horsepower would not have cost nearly the 
amount of money that has been expended. Each spent a very large 
sum in preparing the whole of the house it w^as authorized to con- 
struct for the roof. As I have said, it will require $6,500,000 of 
expenditure on the part of the Ontario company to enable it to 
complete the second and third tubes, which it can hardly be expected 
to do under any limitation of power to be exported, to the extent of 
160,000 horsepower all told. 

Mr. Stetson's companj'' in order to enable it to deliver 110,000 
horsepower will have to spend but $1,250,000. My company in 
order to qualify itself to deliver 125,000 horsepower is required to 
spend but $1,576,000. If it fails to make the requisite expenditures 
and to complete, it will lose a very large amount of its past outlay. 
It can not be doubted that each will complete its work to its full 
capacity. With a comparatively trifling additional outlay, these 
companies will be in a position, respectivelv. to generate pov>'er up to 
125,000 and 110.000 horsepower. 

It was because of these facts, I do not doubt, that when Captain 
Kutz understood the situation lie determined i,t would be inequitable 
to distribute the allotted power amongst the three companies in the 
proportion of the horsepower which each, in the immediate future, 
would be able to generate. He appreciated the equitable considera- 
tion to which Mr. Stetson's company and my company were entitled, 
because of the larger outlays made by each, in the light of a comple- 
tion which must be made, because of the waste which will otherwise 
result. 

I submit that he was entirely right in reaching the conclusion 
that each of the companies stood practicall}'' upon the same plane. 
Under these circumstances, Avhat should be your point of view? 
You are dealing with the beneficiaries of Canadian grants. You 
will not desire, nor will our Government desire, to put upon Canada 
any unfair or unjust discrimination. Looking to the source of the 
grants, and to all the circumstances, you will cloubtless allot the 
power in accordance with what is fair from the point of view of the 
grantor in such Avay as to Avork no discriuiination against it. 

Let us consider some of the things which have been said in opposi- 
tion to wdiat has been suggested by Captain Kutz before considering 
the point upon which I wash mvself to oppose him, 

Yai'ious considerations have been urged. One of these is that 
which grows out of the assertion concerning the contract for 00,000 
horsepower. Upon this subject I have the benefit of Captain Kutz's 
report, Avhich does not come down to us from the middle ages, but 
is dated September, 1906. Although we live in a rapidly moving 
woild. we do not greatly change the status of our affairs in so short 



138 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

a space of time. He reports no contract to deliver 90,000 horsepower, 
saving in connection with the American affiliated company. "Wliat 
he says affords a valuable side light as to the 90,000-horsepower 
contract. This is what really existed at the time of the report, in the 
matter of contract with the company which General Greene does not 
represent and which Mr. Cravath does : 

The Niagara, Loekport aud Ontario Power Company lias actually executed 
contracts which call for the delivery within the near future of (j,000 horsepower. 

There was a contract with the Niagara, Loekport and Ontario; 
but do you think, taking into consideration the fact that even in 
business matters there is a little milk of human kindness, that if by 
some misfortune the Canadian Ontario company can not deliver to 
the Loekport company the whole i)0,000 horsepower Mr. Cravath 
will be hard on General Greene? Do you not think he would take 
an equitable view of the situation ? The only pinch which can come 
will be that which can come from other sources, because of contracts 
which the Loekport company has entered into with third persons. 

Again recurring to the report — 

The Niagara, Loekport aud Ontario Power Company has actually executed 
contracts which call for the delivery within the near future of 0,000 liorsepower 
with provision for fixed increases at intervals, varying from three mouths to 
three years. 

So that 90,000 horsepower is not so much of an exigency as Mr. 
Cravath, on his feet and feeling the fervor of advocacy within him, 
thought. 

The delivery to third persons may rise to 14,000 horsepower, with 
the right to increase, though I do not know under what circumstances, 
to a possible 70,000. Is not the most favorable consideration we can 
give to these contracts that which will put them upon the plane of a 
G.OOO horsepower supplv at the present, rising graduallv in three 
years to 14,240 ? 

Now, as to the date of even these contracts ? '' The first of these 
contracts is dated June, 1905, three others in the fall of 19.05, one in 
March, two in April, and two in May, 1906." 

What faith the Ontario company must have had, despite the hear- 
ings before the couuuittee of Congress and the public sentiment which 
had been aroused, when it made these contracts in March, in April, 
and in May. It was only in May, 1906, that its work of running up 
contracts to the 14,000 and to tlie possible option of 70,000 was done. 

And then, of course : 

'' In addition, the company claims to have contracts verbally closed 
for 13,000 additional firm horsepower, and negotiations pending for " 
some more. There is this trouble about that 90,000 horsepoAver con- 
tracted for. Either they will or will not get allowed by you the 
v^iole amount of that power. If they are allowed the whole 90,000, 
and if Mr. Stetson, as undoubtedly he is, is entitled to and receives an 
allowance of one-third, making 52,500, there will be for the poor 
Canadian company only what is left, 15,000 horsepoAver. If you do 
not allow the 90,000 horsepower inevitable ruin will fall on the On- 
tario, because, with moving eloquence, Mr. Cravath has told you that 
wdth less than that amoinit they can not profitably do business. 

What, then, will be the use of Avorking an unjust equality to accom- 
plish no good ? To allow^ 90,000 horsepoAver to the Ontario company 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 139 

will be ruinous to my company, which, of course, can not profitably 
make the expenditures in America necessary to distribute 90,000 
horsepower. 

To allow the Ontario company 60,000 horsepower, as suggested by 
Captain Kutz, at the expense of the Canadian Compan3% which will 
only receive 37,500 horsepower, will do no good to the Ontario, be- 
cause, as Mr. Cravath says, it can not profitabl}!' operate the 90,000 
horsepower. 

How the 90,000 horsepower is to be generated in a plant which at 
best will produce but 60,000 horsepower has not been explained. 
We are equally left uninformed as to the probability under any ex- 
isting circumstances, of an additional construction, which will enable 
more than 66,000 horsepower to be generated by the Ontario com- 
pany. If you give the Ontario 90,000 horsepower, you destroy us. 
If you do not give them that much an inequalit}^ will be worked 
without any beneficial result to the Ontario. Under these circum- 
stances, Avhere you must ruin us by following Captain Kutz's sug- 
gestion, without benefiting the Ontario, will it not be the exercise 
of a sound judgment to apportion amongst the three companies 
equally 160,000 horsepower, upon the assumption that with that 
amount each may conduct its operation with some profit ? 

Let us for a moment look at the matter from another j^oint of view, 
i. e, from the transmission point. General Greene says : " We have 
spent $1,000,000 in preparation for transmission in Canada, and have 
spent $4,000,000 in preparing for transmission in America. You 
ought to take that into consideration in determining the apportion- 
ment." Does he not lose sight of the fact that in order to get any 
benefit out of his power he must provide for transmission? If he 
wdshes to utilize even 66,000 horsepower he must provide means of 
transmission. He will derive no good from electric poAver generated 
on the Canada side of the placid waters of the Niagara River, after 
its tumble over the Falls, without transmission. 

Allow his company one-third of the 157,500 horsepower and he 
still must transmit the power in Canada along the Niagara River, 
across the latter, and to the American takers. Even under the 
changed state of affairs transmission is necessary and the expenses 
thereof do not enter into the consideration of an equitable appor- 
tionment. Such api^ortionment must be determined by consideration 
of what each company has qualified itself to generate, and the extent 
to which it would be disap])ointed in the utilization of what can be 
generated. 

One consideration has been suggested, which, superficially viewed, 
appears to have some merit. I refer to the claim that the Ontario 
company is entitled to one-third of the quantity, and, in addition 
thereto, to one-fourth of a third, because of its use of a smaller 
amount of water in generating the same amount of electric energy. 
That is, instead of being entitled to four-twelfths, it is entitled to 
five-twelfths, or to 65,000 horsepower instead of 52,500. I am assum- 
ing for the moment that the statement is correct with reference to 
the greater outi)ut of power from the use of a given amount of 
water. I recall nothing in the way of proof of the correctness of 
the statement.' 

If the Canadian government was to reduce the use of water so 
that only a certain amount of water was to be allotted to each of 



140 TKANSMISSION OF POWER FROM THE NIAGARA RIVER. 

the three companies, it will, of course, be necessary to pay each in 
the coin dealt with. We are not dealing, however, in the present 
case with a withdrawal of water. 

We are dealing with three companies, each of which has a right 
to generate more power than it can now utilize, and, by virtue of 
the action, not of the Canadian government, but of this Government, 
these companies, presenting themselves at the American frontier 
Avith more than 160,000 horsepower, are allowed, in the aggregate, 
to deliver to America the restricted quantity of 160,000 horsei^ower. 
It is with the compensation for the horsepower which each could 
deliver, but which the American Government does not allow it to 
deliver, we are dealing. The American Government has nothing 
to do with the withdraw^al of water. So far as it is concerned 
Canada may grant the right to withdraw all the water on its side. 
In no way has any company been restricted in its use of water. I 
submit that Captain Kutz is right in his suggestion that the only 
thing to consider is the apportionment of horsepower. Each com- 
pan}^ may have wasted any amount of water in generating power, 
inasmuch as the limitation imposed by Canada was not upon the ' 
use of the water, but upon the amount of the power to be generated. 
In the present case there was no waste. Whatever ability there is 
in the Ontario to generate a larger percentage of power results solely 
from its geographical situation. 

Secretary Taft. But I presume, Mr. Johnson, it is not unfair to 
infer from the language of the statute and the whole object of it, 
that what Congress had in mind in limiting the horsepower was 
really limiting the use of the water on the Canadian side ? 

Mr. Johnson. Oh, yes; beyond doubt; I will not deny that for a 
moment. 

Secretary Taft. It was the water they were directing their atten- 
tion to. 

Mr. Johnson. Beyond question. The horsepower did not do any- 
thing. 

Secretar}^ Taft. But your claim is that there being this amount of 
liorsepower produced, the question of the division among the three 
companies ought not to be affected? 

Mr. Johnson. By the water taken, because all of them could take 
enough water to answer their purposes. They have two measures on 
the American side. You can have so many cubic feet of diversion 
ultimately measured in horsepower, and on this side it is horsepower 
you have to distribute. He says : " \A^iy, I could manufacture my 
liorsepower cheaper." I say I do not care for that. I do not care 
A^ hether you take more water or not. If nature had stepped in and 
stopped the supply of water, and then there was a shortage, there 
would be a good bit more merit in the measurement of it in that way ; 
but this is an artificial trouble, created by the action of a foreign 
government. The companies are hurt by that action, and they suffer 
in proportion to the capital invested. Another suggestion has been 
made by Mr. Stetson with regard to prior right; and in that, just 
as in this matter of the volume of water, there is something which 
appeals to the mind, although I think our point of view is the right 
one and do not accept their point of view. 

Undoubtedly, if there was a shortage of water on the Canadian 
side, there would have to be a distribution of that water in accordance 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 141 

with the priority of the grant. Priority of grant is not to be con- 
!:idered, in the adjustment of the equities of the parties, if the state 
of affairs be as follows: 

If A, B, and C, in the order of priority I have named, possess 
certain grants with abundant material out of which the grant may 
be supplied, so long as that abundant material continues, even though 
something occurs by which the product from that material can not 
be utilized, you have a case in which priority of the grant to take 
the material goes for nothing. 

Of course, after the act of Congress had become practically prob- 
able, you would not permit a corporation to be considered in the 
adjustment of equities which, thereafter, acquired a grant. All 
these three companies, however, were in operation, each relying upon 
a grant, and each relying upon the continuance of past conditions. 
Although one had a grant which antedated the other, there was no 
shortage in the material with which to supply the grant. Because 
they can not utilize the product generated by their material, they 
gain or lose nothing by reason of their priority. 

Secretary Taft. Mr. Johnson, suppose there was a treaty — indeed, 
it does not make any difi'erence whether there was a treaty 

Mr. Johnson. I hope there will be. 

Secretary Taft. Suppose the Canadian authorities themselves 
acted and said the Dominion government had the power? 

Mr. Johnson. No; they did not. I will show you in a moment, 
because I see they did not. 

Secretary Taft. Suppose they said the government had the power 
to cut off, and said, '' Here, you can take 16,000 cubic feet." I sup- 
pose, assuming that to be by a higher power which could affect a 
grant without being open to the charge of abrogation of its own 
grant, that that right of priority might have a very considerable 
effect. 

Mr. Johnson. Oh, of course, it would. 

Secretary Taft. Because there it relates to the very subject-matter 
which was made the basis of the grant. 

Mr. Johnson. Quite so; and I will show you in a moment that 
they did not have the power. 

I grant you that if that priority carried with it the right to exer- 
cise the power to affect the grant the condition would be different. 
In the present case it was not exercised by the sovereignty which 
granted, but by another; but suppose it was exercised by the sov- 
ereignty which granted, there was nothing in the form of a grant 
which was prior, which carried with it any right as against the sub- 
sequent grant, on the part of the sovereign, to take away anything 
included in the later grant. Of course, each company would have 
the right to take water in case of a shortage thereof, in the order of 
their priority. In case of such shortage the exercise by the first 
company of its right might destroy all benefit of the later grant. 
Because of the fact that there was no reserve power to affect the 
grant, saving to the extent originally reserved, I was going to read 
you what is in the agreement conferring the right : 

26. It is further agreed that if from any cause the supply of water at the 
point of intake, as by these presents defined, be diminished, the syndicate shall 
have no claim or right of action against the commissioners, but may deepen 
such point of intake to such extent as to restore the supply of water to the 



142 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

volume or quantity necessary for the purpose of the syndicate, and that the 
granting or licensing of rights to the syndicate by these presents shall not give 
the syndicate any right of action against the commissioners nor give the syndi- 
cate any right of action against other licensees or grantees of the commissioners 
in resi)ect of any diminution not substantially interfering with the supply neces- 
sary for the syndicate, nor so long as the necessary supply can be obtained by 
means of deepening at said point of intake. 

That is a reservation of power in the grantor in case of a faihire of 
the supply of water at the intake, making it the duty of the htter 
grantee to deepen the svater at that point, and if it can not do so, by 
reason of the diminution of the supply of water, it will have no right 
of action against the commissioners by reason of the later grant being 
made. There is no reservation, however, of power of the grantor to 
resume any portion of the grant for the benefit of the grantor. 

The grant gives the right to each grantee, to the last as well as 
the first, absolutely, to take up to the extent permitted, so long as the 
supply of water holds out. If, therefore, the Canadian government, 
under the exercise of the right of eminent domain, which it may or 
may not ]30ssess — and I care naught about that — were to take any 
portion of the water, it would have to compensate, and it could take 
no more from the last than from the first, because it reserves no right 
excepting that of immunity in case of the deficiency of water. 

Now, let us see where we stand upon the matter of discrimination 
suggested by Captain Kutz. In every one of these grants the 
Caiiadian government says : '' It shall be your duty to deliver in 
Canada, if there is any demand for it, at a price not greater than 
the price in America, one-half of all your output." 

Therefore all these companies came into existence with a knowl- 
edge that it was obligatory upon them if there should be a Canadian 
demand to supply it to the extent of one-half their output, with 
the liberty, as against such demand, to deliver one-half of such out- 
put in America. Of course, as long as no demand should exist in 
Canada for its one-half, all might go to America. 

Captain Kutz suggests that inasmuch as my company has built 
a line of transmission to Toronto, and will probably supply 30,000 
horsepower in Canada — his figures I think are a little high, but I 
am concerned more over the principle than the figures — while the 
Ontario will only supply about 10,000 horsepower, and Mr. Stetson's 
company about 5,000 horsepower, therefore, we having been con- 
stituted primarily for the supply of power in Canada and being 
likely to supply 30,000 horsepower there as against 15,000 by the 
two other companies, there ought to be a deduction of 22,500 horse- 
power from our allowance, to be distributed amongst the others. 

It is difficult to gather from the terms of the grant any support for 
the suggestion that one company rather than another was constituted 
" primarily " for the supply of power in Canada. All were obliged 
equally to guarantee a Canadian supply, and all reserved equally the 
right as to one-half of its product to deal with America. Let us 
see whether the suggestion of Captain Kutz is just. In the first 
place it would have an unfortunate result. My company, as I have 
said, is Canadian through and through. It would sound oddly if it 
was forbidden to deliver its fair proportion as allowed by the grant 
in America, the duty toAvard Canada of all the companies being the 
same, because it had put itself in position by a large expenditure to 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 14H 

supply a Canadian demand, probably with a view to recoupment by 
the exercise of its privilege in America. 

I do not believe any treaty will ever be made upon any basis Avhich 
will work an inequality as against a purely Canadian company be- 
cause of its having prepared itself better than the other companies to 
do its duty by its grantor. It is exceedingly improbable that the 
equal rights granted to each by Canada will be permitted to be made 
une(}ual becau.se the naturalized Canadian companies have sought for 
the American market solely. 

My company has qualified itself to the extent of 30,000 horsepower 
out of the one-half supply which it must reserve for Canadian use, 
and because of its being better able to do its duty toward the sovereign 
which has created it it is insisted upon by the other companies that be- 
cause thereof it shall be practically cut off from the American market. 

The American is undoubtedly the best market, because the greater 
demand in America for electric power enables a higher price to be 
realized. It may well be doubted if any company would have acted 
upon a Canadian grant if it had not had the opportunity of securing 
such market. 

It is suggested that the purely Canadian company shall be un- 
equally dealt with for no other reason than because it has been will- 
ing to do for Canada that which is there wanted, with the result, if 
the unequal distribution be allowed, of exonerating the other compa- 
nies from supplying the cheap home market. 

Secretary Taft. What is the difference in the sale of horsepower ? 

Mr. Johnson. I would say $10 or $12 ; but I merely say that upon a 
statement made to me. Captain Kutz can perhaps tell you a great 
deal better than I can. I would say $10 or $12 at Niagara Falls. 

Secretary Taft. You think there is a difference of about $10 a 
horsepower ? 

Mr. Johnson. I think $10 or $12; but you can find that out from a 
more reliable source of information than myself. 

Secretary Taft. But as a matter of fact there is a large difference? 

Mr. Johnson. Oh, a very large difference. I guess Mr. Burton can 
tell what they are delivering horsepower at Niagara Falls for. Per- 
haps he does not want to. 

Mr. Burton. There is a difference. There is more demand on the 
American side, and the prices are somewhat higher. 

Mr, Johnson. " Somewhat "" is a euphonistic word, is it not ? 

Mr. Burton. Yes. 

Secretary Taft. Do I understand there is a difference of $10 or $12? 

General Greene. AVe are selling on the Canada side at $13 and on 
the American side at $16. 

Mr. Johnson. Well, that makes enough. I know it does not ap- 
ply to Mr. Stetson's company, and I know the Ontario made a bad 
contract for themselves at Syracuse, which I have no doubt it will 
be very sorry after a while it made. 

Then we are penalized for having done our duty ; but suppose you 
have given us but 37,500 and have given them 60,000 horsepoAver. 
Thej^ step in, and, having gotten the rich market, can afterwards 
very well in competition undersell us. 

They can beat us out of the Canadian market also, because if the 
product is sold on the Canadian side for $13, and on the American 



144 TRANSMISSIOISr OF POWER FROM THE NIAGARA RIVER. 

side for $16, after the $16 contracts have been filled the company 
which gets its power from Canada can undersell the coi-poration 
which has been deprived of the American market by underbidding 
in Canada. Where is the justice or equality in that? . 

The result is they can cut us down to 37,500 horsepower. All the 
companies have made a large outlay on the American side. The 
syndicate which controls my company has spent. Captain Kutz says, 
$1,000,000 on this side. It is building a railway for the purpose of 
obtaining a right of way which it can not otherwise acquire be- 
cause, with the candor which usually distinguishes railroad corpora- 
tions, a railroad franchise is used for acquiring what can not be 
acquired by the company which desires the same through an exer- 
cise of the right of eminent domain. All the companies have spent 
and are expecting to spend large amounts of money in America. 
Very large outlays made by my company in transmission will be lost 
if it is cut oti' from the American market. 

It is impossible to deliver economically in America horsepower 
to the extent of but 37,500. Under my instructions it will not pay 
to provide the necessary transmission for less than 52,500 horse- 
power. 

If, therefore, because we have done our duty by our grantor we are 
limited to an exjjortation into America of horsepower insufficient to 
justify the outlay, you will have given to the purely American com- 
panies the use of Canadian Avater to the exclusion of the Canadian 
company, which possesses a grant from the sovereign equal to the 
favored companies. 

Mr. Dudley. Mr. Secretary, I desire to make a statement in behalf 
of the Niagara Falls Electric Transmission Company, which is the 
American distributing company. 

Secretary Taft. That is the distributing company for Mr. John- 
son's company ? 

Mr. Dudley. Yes. 

Secretary Taft. You are the twin of Mr. Johnson ? 

Mr. Dudley. I have my statement here. 

Secretary Taft. You may present it. 

STATEMENT OF FRANK A. DUDLEY, REPRESENTING THE NIAGARA FALLS 
ELECTRICAL TRANSMISSION COMPANY. 

Captain Kutz has found no basis for discrimination against the 
Electrical Development Company and the Niagara Falls Electrical 
Transmission Company other than a belief that the Electrical De- 
velopment Company ^dll probably be able to sell in Canada 20,000 
to 25,000 horsepower in excess of what either of the other two com- 
panies will sell in Canada, which conclusion we humbly submit is not 
justified by the facts, but if so, would not be a just basis for dis- 
crimination against us in the American market. 

We agree with that part of the findings of Cajotain Kutz and the 
American members of the International Waterways Commission 
which says : 

After a careful consideration of the amounts of capital invested in the power 
plants, the amounts requii'ed to complete the works as designed, their capacity 
as completed under expenditures now made or pledged, their capacity as de- 



TRANSMISSION OF POWER FROM THE NIAGARA RIVER, 145 

signed, the amounts of eaiiital invested in transmission lines in the United 
States or on Canadian soil to connect with the United States, the contracts 
made for furnishing and receiving power, and other data, that there is no 
suflicieut reason for discrimination hetweeu the companies. 

But we do not agree to the exception which follows. We can not 
concede that the superior ability of one company or the other to sell 
power in the open market of Canada should have any relation to 
the right to sell power in the United States. 

Each of the three great power-producing companies on the Cana- 
dian side has received equal rights and treatment from the Canadian 
government. No discrimination is made against two of them because 
they are controlled b}^ American capital. In fact, the Canadian gov- 
ernment has given to one of the companies controlled by American 
capital the right to take and use water of the Niagara River sufficient 
to develop 180,000 horsepoAver, while limiting the right of the com- 
pany controlled by Canadian capital to the use of water sufficient 
only to develop 125,000 horsepower. No limitation or restriction is 
placed upon the American-controlled companies in marketing their 
power in Canada. Equal facilities, including the right of ex-appro- 
l^riation, is given to each to extend its transmission lines anywhere 
within the Province of Ontario it may see fit, to reach or establish a 
market. An open market is freely afforded to all alike. 

It should be borne in mind that the power which is to be trans- 
mitted into the American territory and there sold in the develop- 
ment of American industries is power generated from the waters 
of the Niagara River belonging to the Canadian government, and 
since the Canadian government imposes no restrictions on the Ameri- 
can-controlled companies in using the water for power purposes, or 
in selling the power in Canada, it would seem only just and equitable 
that those companies should not have greater rights of power trans- 
mission in the American territory by reason of anything the Secre- 
tary of War should do or refrain from doing under the provisions 
of the Burton bill than are given us. 

The facts are, however, that the Electrical Development Company 
is just beginning to sell power in Canada, It has no monopoly of 
the Canadian market. It has constructed a transmission line to To- 
ronto and exj^ects to transmit power to concerns in which the 
" Nicholls syndicate." so called in Captain Kutz's report, is inter- 
ested. A^liat the additional market will be is as unknown to the 
Electrical Development Company as to either of the other compa- 
nies. Whatever market there is exists alike to all. 

As was stated yesterday, the Province of Ontario has determined 
that power shall be supplied to the various municipalities within 
the radius of economical power distribution, and the demand from 
the various municii^alities for power within the transmission area, 
so called, amounts to about 90,000 horsepower. This is a real de- 
mand, and public sentiment will eventually compel its fulfillment. 
Captain Kutz apparently entirely overlooked this principal oppor- 
tunit}^ to sell power on the Canadian side of the current. If I am 
correctly informed, each of our competitors is actively in the field 
for this market, and from such information as we now possess it is 
more than probable that one or the other, or possibly both, Avill sell 
some proportion of their output to the provincial government for 

18447—06 10 



146 TKANSMISSION OP POWER FROM THE NIAGARA RIVER. 

the use of the municipalities. A statute has been passed and the 
necessary legal steps taken to accomplish that result. 

Respecting the ability of the Canadian power-producing companies 
to market some of their output in Canada and their preparations 
therefor, Captain Kutz says (p. 26) the Toronto and N'iagara Power 
Company, the Canadian distributing company for the Electrical De- 
velopment Company, are now constructing transmission lines to 
Toronto with a capacity of 20,000 horsepower. 

The Ontario Transmission Company, the Canadian distributing 
company for the Ontario Power Company (p. 22), have installed, 
or there are being installed, lines to Welland, St. Catherines, and 
Thorold ; that the capacity of their transmission lines for Canadian 
distribution is 6,000 horsepower. 

The Canadian Niagara Power Company is building transmission 
lines in Canada from Niagara Falls to Fort Erie, a distance of 16 
miles along the Niagara River, where naturally the greatest develop- 
ment will be likely to occur, with an ultimate capacity of 50,000 
horsepow^er. Wliile this power may be used largely in Buffalo, it is 
available to develop the Canadian frontier just as their American 
power was to develop the American frontier. 

The Electrical Development Company has sought only the Toronto 
market in Canada. The whole province within economical distribu- 
tion, with its numerous cities and villages, is open to all companies 
alike, and it is not within the province of any man to foretell which 
company will be selling the most power in Canada five years hence. 

Therefore we maintain that the only reason which Captain Kutz 
and the American members of the International Waterways Com- 
mission give as a reason for discriminating is not, in fact, a valid 
reason, because it is not a fact that there is a probability that the 
Electrical Development Company will be able to sell in Canada from 
20,000 to 25,000 horsepower more than either of the other two 
companies. 

It is absurd to contend that the promoters of the Electrical De- 
velopment Company, at the time of organization, did not have 
definitely in mind the American market. It was known to the or- 
ganizers of that company as well as to the organizers of each of the 
other companies that an American market for power existed ; that a 
Canadian market would, to a large extent, have to be developed; 
that it was more expensive to, develop a market for power on the 
Canadian side than to supply power to an existing market on the 
American side. 

We must assume that the power companies were organized and 
developed for the principal object of making money, and that the 
American market was an essential aim of each of the companies. It 
Avas known to the Electrical Development Company at the time of 
the inception of that enterprise that a market would not .exist in 
Canada for the entire output of its plant, and it was undoubtedly 
the intention of that company, as evidenced by the statute under 
which it was organized, to sell 62,500 horsepower in the American 
market. 

The Niagara Falls Electrical Transmission Company is a New 
York State corporation, having received its charter by the sovereign 
authority of the State. It stands on an equal footing with the 
Niagara Falls Power Company and the Niagara, Lockport and On- 



TEANSMISSION OF POWER FROM THE NIAGARA RIVER. 147 

tario Power Company, ho far as relates to legal rights. All three 
companies acquired franchises and vested rights prior to the knoAvl- 
edge that any restrictive legislation would be introduced. 

Captain Kutz reports that the Canadian Niagara Power Company 
and its allied transmission company haxe expended or are committed 
by contract to an expenditure for transmission lines in Canada for 
$430,000. He reports the books of the Niagara, Lockport and On- 
tario Company show an expenditure of $2,785,000, of which $1,200,- 
000 is represented by right of way and $1,10)2,000 is represented by 
construction. 

The Niagara, Lockport and Ontario Power Company in its brief 
(p. 12) makes the further claim, '"" That the expenditure to date for 
transmission lines and Avorks exceeds $3,500,000 and will reach 
$4,000,000 by January 1, at which date the works will be nearly com- 
pleted.'' The Niagara, Loclvport and Ontario Power Company con- 
tend in their brief (p. 11) that '' the Canadian Niagara Power Com- 
pany has not expended all of the $430,000, the amount to which it 
was obligated for its transmission lines." 

Captain Kutz states (p. 9): ''The value of the properties con- 
trolled by the Niagara Falls Electrical Transmission Company is 
approximately $1,000,000," which is a correct statement. The $246,- 
000 represents, in part, the purchase price of property now belong- 
ing to the Niagara Falls Electrical Transmission Company ; the dif- 
ference in value, approximately $754,000, is represented by property 
rights and maturing obligations of the subcompanies which the 
Niagara Falls Electrical Transmission Company is obligated to pro- 
vide for. The Buffalo, Lockport and Eochester Raihvay is a sub- 
sidiary company, which is controlled by the " Nicholls syndicate." 
Its relations to the Niagara Falls Electrical Transmission Company 
are those of common ownership. Captain Kutz says the " Nicholls 
syndicate," a group of men who control the Electrical Development 
Company, gives control of these subsidiary companies to the power 
company. He further says (p. 9) : 

For carrying its transmission line to Rochester tlie Electrical Transmission 
Company proposes to use the right of way of the Buffalo, Lockport and 
Rochester Electric Railway. There is no contract to this effect, but as the 
Buffalo, Lockport and Rochester Electric Railway is controlled by the " Nich- 
olls syndicate," above referred to, there is a community of interest. The Buf- 
falo, Lockport and Rochester Electric- Raihvay Company is now under con- 
struction, the contract for grading a double-track road and for the construc- 
tion of a single-track road having been entered into with .J. G. White & Co., 
contractors, on May 14, 1906, at a cost of $2,2.50,000. 

In addition to the expenditure mentioned in the contract, Captain 
Kutz omitted to state that $800,000 had been exj^ended in organiza- 
tion, rights of way, and construction prior to the signing of the con- 
tract May 14, and the purchase of the road had been concluded by 
the " Nicholls syndicate " in the fall of 1905. Thus the total sums 
represented by the value of the property of the Niagara Falls Elec- 
trical Transmission Company, $1,000,000, and the sums expended 
and commitments made in connection with the Buffalo, Lockport 
and Rochester Electric Railway, $3,050,000, is $4,050,000 as against 
$4,000,000, the amount required to nearly complete the transmission 
lines and works of the Niagara, Lockport and Ontario Power Com- 
pany. 



148 TRANSMISSIOlSr OF POWER FROM THE NIAGARA RIVER. 

It is, of course, apparent that the right of way from Lockport to 
Rochester will be of no use to the Niagara Falls Electrical Trans- 
mission Company without it is able to obtain a right of way through 
the intervening territory from Niagara Falls to Lockport. The 
cost of this right of way, based upon the estimates of Mr. Walter 
Pearson, chief engineer, and the estimates of real-estate agents em- 
ployed to secure the right of way in connection with the Interna- 
tional Railway, will be the sum of $750,000. This is a definite com- 
mitment, upon which the International Railway, in carrying out 
their part of the agreement, are now proceeding. This includes, 
from a common point, a right of way for a transmission line into 
the city of Buifalo. This is an investment which the Niagara Falls 
Electrical Transmission Company is, of necessity, obliged to make. 

The cost of 100 miles of transmission lines to reach the city of 
Rochester and the city of Buffalo Avill require a further expenditure 
of $1,500,000. The cost of distributing and transforming stations 
will require an expenditure of $1,000,000, making a total of expendi- 
tures to which this company and the Buffalo, Lockport and Roches- 
ter Electric Railway Company are definitely committed, if its Ameri- 
can investment is to succeed, of $7,300,000, or 82| per cent more 
than will be required by the Niagara, Lockport and Ontario Power 
Company for their American investment. As the Niagara, Lock- 
port and Ontario Power Company have no allied railway company 
using the same right of way as their transmission company, we de- 
duct on account of the value of the railway proper, $2,300,000, 
allowing but $750,000 for right of way from Lockport into the city 
of Rochester, leaving $5,000,000, which will fairly represent the 
total of necessary expenditures made or to be made to complete our 
transmission and distributing system in accordance with plans 
adopted prior to the enactment of the present law. 

Our contracts entered into and our acquisitions made have been 
entered into and made with the most serious intent to transmit into 
the United States territory and sell 02,500 horsepower. Our in- 
vestments in distributing, transmission, and railroad systems never 
would have been made had we supposed we Avould have been limited 
in our rights to import power. Our engineers tell us it is impossible 
to make a financial success of our transmission enterprise if we are 
allowed to receive and transmit less than 50,000 horsepower, and 
that we would not be justified in constructing our transmission lines 
to Rochester and Buffalo to transmit but 37,500 horsepower. 

We are obligated to furnish power to various of the municipalities 
between Niagara Falls and Rochester, and to furnish power to 
operate the Buffalo, Lockport and Rochester Railway, and to furnish 
power to the customers of the Albion Power Company, and the only 
practical way, having a regard for a fair return on the investment, 
is to carry out our plans for the sale and distribution of 62,500 horse- 
power by transmission lines extending to Buffalo and to Rochester. 

AVith all justice to engineering skill and business management of 
the Niagara, Lockport and Ontario Power Company, we believe 
our plans for a transmission system are more elaborate than theirs, 
the distinguishing feature being that we contem])late the ownership 
or control of distributing systems in the territory of western New 
York which, of necessity, requires a larger expenditure. The suc- 
cess of our railroad enterprise depends largely on sharing the ex- 



TRANSMISSION OF POWER PROM THE NIAGARA RIVER. 149 

pense of right of way with our transmission company, the obtaining 
of power from our transmission company, and the development of 
industries along the right of way by the transmission company. 

The financial success of our transmission company depends on the 
amount of power we are permitted to transmit. No transmission 
company would prove a financial success in western New York, with 
an investment of $4,000,000 oi' more in transmission and distributing 
systems under known conditions, if it were permitted to receive at 
Niagara Falls and transmit only 37,500 horsepower. Hence the giv- 
ing to any other transmission company greater rights, so far as 
relates to the amount of power to be received and transmitted, must 
inevitably be a discrimination against us, giving to the other com- 
panies the advantage of a larger return on their investment, placing 
us where we are unable to compete with the other companies, and, in 
fact, limiting our sales of power to those companies which we control. 
In our minds, no good reason can be found for such a discrimination. 
Our plans for the sale of Canadian power in the United States were 
made before the introduction of the Burton bill, and our vested rights 
equal in importance those of any other company. 

In section 4 of the Niagara, Lockport, and Ontario Power Com- 
pany's brief, page 5, it says the present investment on the Canadian 
side of the three applicants was found by Captain Kutz to be as 
follows : 

Ontario Power Company $5,142,000 

Electrical Development Company 4,500,000 

Canadian Niagara Company 4,672,000 

It has, howcA^er, entirely ignored the additional statement from 
Captain Kutz's report, that the amount required to complete the 
existing contracts of the three companies is as follows : 

Ontario Power Company $715,000 

Electrical Development Company 1.760,000 

Canadian Niagara Company 678,000 

which amounts, it would seem, should be added to that already spent 
and which would then complete the plants to a point as noted in Cap- 
tain Kutz's report, paragraph 24, page 12, where the Ontario Power 
Company would have developed 6G,000 horsepower, the Electrical De- 
velopment Company 50,000 horsepower, and the Canadian Niagara 
Power Company 55,000 horsepower, thus at that point making the 
total investment of the three companies as follows : 

Ontario Power Company $.5,857,000 

Electrical Development Company 6,260,000 

Canadian Niagara Power Company 5, .350, 000 

of which sum the Ontario Power Company will have spent SS/o per 
cent, the Electrical Development Company BSj^u per cent, and the 
Canadian Niagara Power Company 30j% pei" cent. 

If this percentage is used for a basis of computing the division of 
the 100,000 horsepoAver among the three power companies, the allot- 
ment would be as follows : 

Horsepower. 

Ontario Power Company 53. .500 

Electrical Development Company 57. .500 

Canadian Niagara Power Company 40. 000 



150 TRANSMISSION OF POWER FROM THE NIAGARA RIVER. 

which we submit is as equitable as the division proposed by any of 
the other companies. 

The other companies contend that by reason of their starting their 
enterprises at an earlier date they are entitled to prior rights in the 
American territory ; but it should be borne in mind that since the be- 
ginning of its construction the Electrical Development Company has 
made the greatest i^rogress toward the total completion of its plant, 
and according to Captain Kutz's report, page 12, the amount re- 
quired in addition to that already spent and contracted for to com- 
plete the plants of the three companies is as follows : 

Ontario Power Company : $6,500,000 

Electrical Development Company 1, 576, 000 

Canadian Niagara Power Company 1,250,000 

making the total cost of each plant, when completed, as follows : 

Ontario Power Company $12,357,000 

Electrical Development Company 7,836,000 

Canadian Niagara Power Company 6,550.000 

Of these amounts the Ontario Power Company has spent onl}^ 45 
per cent needed to complete its plant, the Electrical Development 
Company about 80, and the Canadian Niagara Power Company about 
80 per cent. 

Therefore, if diligence is to be rewarded, or is a matter to be 
considered in the computation as to distribution of power on the 
American side, the Electrical Development Company and the Cana- 
dian Niagara Power Company would stand on equal footings, while 
the Ontario Power Company would be entitled to but little more 
than one-half the jDower which should be allotted to the other two 
companies, and on this point Captain Kutz says, " AAliile the projected 
development of the Ontario Power Company is considerably greater 
than that of the other two companies, this apparent advantage is 
balanced by the fact that the other two companies are more fully com- 
mitted by the expenditures already made to the complete develop- 
ment." 

I assume it is among the possibilities that the Ontario Power 
Company may never proceed Avith its development beyond the com- 
pletion of the development to produce 6G,000 horsepower. The fact 
must be borne in mind that one of the great integral parts of its 
work is the building of the conduits through the Queen's Park; that 
but one conduit is now in place, and, so far as we can ascej'tain, no 
efforts are being made to install the others. 

Captain Kutz finds that the Ontario Power Company has no con- 
tracts calling for the delivery of the second block of 60,000 horse- 
power earlier than Januai*y 1, 1911, and that means the construction 
by the Ontario Power Company of a second conduit and a conse- 
quent expenditure of $3,250,000. Therefore, within a reasonable 
future the Electrical Development Company will actually be devel- 
oping 125,000 horsepower as against G(),000 horsepower produced by 
the Ontario Power Company. 

The Ontario Power Company claims that because it makes greater 
use of a given amount of water — that is, develops power under a 
greater head — it should be entitled to greater consideration in the 
allotment of power in the American territory. Captain Kutz duly 
considered that claim and dismissed it, stating that each of the com- 



TUANSMISSION OF POWER FROM THE NIAGARA RIVER. 151 

panies fully utilizes the head incident to its geographical location, 
and any distinction in the matter of permits based on relative natural 
advantages would appear to be unjust. 

In conclusion, there seems to be no good or sufficient reason why 
any discrimination should be made by the Secretary of War against 
the Electrical Development Company and the Niagara Falls Elec- 
trical Transmission Company in the allowing of permits for power 
to be transmitted into the American territory. 

The real object sought to be attained by the United States authori- 
ties was the limitation and regulation of the use of tlie waters of the 
Niagara River in tlie development of power by treaty between the 
Government of the United States and the Government of Great 
Britain. We believe it was recognized both by the President and 
Congress that the Burton statute was not intended to be a final solu- 
tion of the questions relating to the regulation and control of the 
waters of the Niagara River for power purposes, but that the final 
solution could come only with a treaty which would have the ap- 
proval of the great business and commercial interests of both coun- 
tries, having a due regard to the preservation of the falls for their 
scenic value and their use in the development of power for their 
economical value. 

Without desire to unnecessarily emphasize the statement of Captain 
Kutz, viz, " On the other hand, any greater discrimination against the 
Electrical Development Company, which is owned almost wholly by 
Canadian cajiitalists — the other two companies being owned almost 
wholly by Americans — may give rise to a feeling of resentment on the 
part of the people of Canada and tend to retard the negotiation of a 
treaty between the two countries concerning the preservation of 
Niagara Falls,'' I am certain that in Captain Kutz's most thorough 
investigations he found a unanimous sentiment existed in Canada in 
favor of permitting the applicant and its associate power-producing 
company to share equally with either of the other companies so far 
as relates to sharing the American market. The people of Canada 
who represent much of its industrial and transportation development 
can not but feel, if their government makes no discrimination against 
American-controlled companies in Canada seeking a Canadian 
market, it would hardly be just for the United States to make a dis- 
crimination against Canadian-controlled companies in the United 
States seeking a United States market, and the injustice of such a 
discrimination seems to be more apparent when it is considered that 
the waters from which the power is made, to be transmitted into and 
sold in the American territory, are waters belonging to the Canadian 
Government. 

Therefore it seems that if the object of the statute is to be attained 
viz, a treaty negotiated, the first essential is that the great busi- 
ness interests of the two countries should be reasonabl}^ satisfied 
with the division of power-transmission rights under the Burton bill. 

Whatever the necessities of the other two companies ma}^ be 
respecting the American market, they are not greater than the neces- 
sities of our company respecting the American market, and our 
Canadian friends rest in confidence in their belief that the Secretary 
of War will recognize the full justice of their claims. 

Secretary Taft. If there is any desire on the part of anybody to 
file an answer or additional suggestion to what Captain Kutz says 



152 TRANSMISSION OF POWER PROM THE NIAGARA RIVER. 

in his construction of the briefs of counsel, I will be very glad to 
see it. 

Mr. Greene. Within what time? 

Secretary Taft. Within a week. Mr. Root is anxious to take up 
this matter. 

Mr. Greene. Is there not going to be a distribution of this pretty 
soon ? 

Secretary Taft. As soon as I get through with my annual report. 
I will have to get that in during the first week in December. 

Mr. Greene. There has been a perpetual extending of the per- 
mission to file briefs. They were to have been filed the 3d of 
November, and to-day there were a lot of briefs coming in. 

Secretary Taft. But you were in the Engineer Corps, and these 
other gentlemen and I have been in the profession of the law. The 
time for filing briefs goes on indefinitely. 

Mr. Greene. I think perhaps we should like to reply to Captain 
Kutz, in all friendliness, but we expect some time to be fixed when 
the filing of briefs shall cease. 

Secretary Taft. It is not necessary to let you have his statement 
at all. I am not sure, but I think he questions one of your state- 
ments. 

Mr. Greene. I would like to answer, but I desire to have a time 
fixed when the answer is to be back. 

Secretary Taft. You had better get it in in the course of a week. 
Mr. Root spoke to me to-day and said he was anxious to confer with 
me on this subject before I make a decision, because, as we have 
heard, the question of a treaty with Canada may be more or less 
affected by what we do. Of course I should not like to take any step 
that would interfere Avith his action in the matter. TV-liat I do, 
therefore, will be after conference with him; but I am very doubtful 
whether I shall be able to dispose of it before New Year's. 

Mr. Lovelace. I do not like to say much in Mr. Stetson's absence, 
but we are right up against the point where we want to have this 
matter decided. We want it very soon. 

Secretary Taft. Gentlemen, they put this matter on the Secretary 
of War, and it will have to be taken into consideration that he has 
to attend to other duties besides this Niagara Falls matter. I will 
take it up and dispose of it as soon as I can. 

(The hearing was thereupon adjourned.) 

O 



LE Ap '08 



